Yes. Although your 401(k) is tax-deferred, it’s not tax-free: When you start withdrawing after age 591/2, 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 401(k), you were able to put in about 25 percent more money to grow for you.
