Key Takeaways
- A single 65-year-old with no other income would need to withdraw $50,971 from a pre-tax 401(k) in 2026 to keep $4,000 a month after federal tax.
- Three 2026 deductions together shelter the first $24,150: the standard deduction, the extra standard deduction at 65 and the new $6,000 senior deduction. That brings the federal tax down to $2,971.
- If the retiree withdraws 4% of the balance in the first year, the 401(k) would need about $1.27 million.
- The $6,000 senior deduction ends after 2028. Using 2026’s figures, losing it would mean taking out $818 more each year.
More than 4 in 10 Americans have never tried to work out what retirement will cost them, according to a survey by the financial-planning platform Evergreen.ai. Among people who expect to retire within 15 years, 1 in 3 still haven’t run the numbers.
If you’re single and that’s you, I have some good news: through 2028, the IRS lets a single retiree keep more of a 401(k) withdrawal than you might think.
Start with $4,000 a month
Take a hypothetical single 65-year-old who wants $4,000 a month to spend after federal tax, or $48,000 a year. They’re waiting to claim Social Security, so for now a pre-tax 401(k) is their only income.
Every dollar that comes out of a pre-tax 401(k) is taxable income. So this retiree has to withdraw more than $48,000 to cover the tax as well. How much more depends on what the IRS lets them deduct first.
Three deductions before any tax
For 2026, this retiree can take three deductions off their income:
- The IRS’s standard deduction of $16,100 for a single filer
- An additional standard deduction of $2,050 for an unmarried filer who’s 65 or older
- The new $6,000 enhanced deduction for seniors, which the IRS says runs from 2025 through 2028 and phases out above $75,000 of modified adjusted gross income
That adds up to $24,150 of withdrawals the IRS doesn’t tax at all. Above that, the IRS taxes the first $12,400 of 2026 taxable income at 10% and the next slice, up to $50,400, at 12%.
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$50,971 out, $2,971 in tax
Say this retiree withdraws $50,971 in 2026. Take off the $24,150 of deductions, and $26,821 is left to tax.
The first $12,400 of that is taxed at 10%, or $1,240. The other $14,421 is taxed at 12%, or $1,731. That makes a federal tax bill of $2,971, which leaves $48,000, or $4,000 a month.
Not bad at all. Less than 6% of the withdrawal goes to federal tax.
Now for the size of the account. Assume this retiree withdraws 4% of the balance in the first year. At that rate, the 401(k) would need to hold 25 times $50,971, which is $1,274,275.
So a single retiree at 65 with no other income needs about $1.27 million in a 401(k) to net $4,000 a month after federal tax.
Of course, few people will live on a 401(k) alone for long. Once Social Security checks start, each dollar of benefit is a dollar that doesn’t have to come out of the account, so the balance this retiree needs gets smaller.
Room to spare in the 12% bracket
This retiree has $24,150 of deductions, and the 12% bracket goes up to $50,400 of taxable income. That means they could withdraw up to $74,550 in 2026 before any of it is taxed at 22%. For someone with no other income, that’s just under the $75,000 of modified adjusted gross income where the senior deduction starts to shrink.
So in a year with a big bill, like a new roof or a car, each extra dollar out of the 401(k) costs 12 cents in federal tax, up to that $74,550. Both age-65 extras only help a retiree who takes the standard deduction instead of itemizing.
For anyone who isn’t there yet, the IRS lets savers 50 and older put up to $24,500 plus an $8,000 catch-up into a 401(k) in 2026, or $32,500 in all. Workers who turn 60, 61, 62 or 63 this year get an $11,250 catch-up instead, for $35,750 in all.
After 2028, the $6,000 goes away
The enhanced deduction for seniors ends after 2028. Using 2026’s figures, losing it would add $720 to this retiree’s tax ($6,000 at 12%). Covering that means taking $818 more out of the 401(k) each year, $51,789 instead of $50,971. At a 4% withdrawal rate, that’s about $20,000 more in the account. We’ll see 2029’s actual brackets and standard deduction when the IRS publishes its inflation adjustments in the fall of 2028.
The way I see it, anyone whose retirement runs past 2028 should size their 401(k) as if the $6,000 were already gone, and treat it as a bonus for the three tax years it has left, this one included.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
