Let’s say I leave my job and roll my 401k and pension into an IRA.
Say I don’t work, only living off the IRA.
As long as I only take out $10,000 a year, I won’t owe any federal taxes because that is the “standard deduction” according to the IRS.
Furthermore, if my residence is in one of the states that don’t have state income tax, I won’t owe any state taxes either.
I would only be liable for the 10% penalty because I’m not 59 and a half.
Am I correct?