401k and tax
Let’s say I keep putting my money in various target funds, sp500 through 401k. After I become 60, my funds become 2x. Now that I want to withdraw my 401k account and move that money into savings, would I have to pay capital gains tax as my investments have doubled?
No. If you contributed to pre-tax 401k, all withdrawals are taxed as regular income. If you contributed to Roth 401k, withdrawals are not taxed at all.
IRA/401k withdrawals are taxed as regular income, not capital gains irrespective of whether you’re withdrawing contributions or gains. Nothing in that account is considered capital gains.
Why do you want to withdraw it to put it into savings? It is in savings? 401k is intended to be a source of income in retirement. You should leave it as is and withdraw as you need cash in retirement.
It all depends if you contributed pre-tax or post-tax or a mix of both.
Majority is pre tax , some in roth. However even if it is post tax, I am talking about capital gains tax. I am not talking about taxes which I anyway owe as part of my pay check(applies to pre tax)
Roth always grows (gains) tax free. On other after-tax contributions instead there’s tax only on the gain I think (unless, but here I’m not completely sure because I’ve never done it, you do the mega backdoor conversion for those).