Will I have to pay taxes when I withdraw my money? Yes. Although your pension is tax-deferred, it’s not tax-free: When you start withdrawing after age 55, you’ll have to pay taxes. But don’t feel bad about paying these taxes, since your money will have been compounding at an accelerated rate for the last thirty to forty years. Because you agreed to invest your money in a pension, you were able to put in about 20% more money to grow for you.
