MDM ...You're right, there is the 12,000 single & more for couples that is the deduction is effectively 0%.
As for my selection of 15 years... your goal is to save taxes and spread it out over as many years as you can to be in a lower tax bracket. It would be dumb to save taxes over say 5 years and then take it in a lump sum...you'd be deferring taxes but you might pay more due to the higher bracket.
And yes, I'm almost 44 now. I may retire any day, I'm beyond my goal. So 45 + 15 years payouts gets me to age 60. Since that's after 59 1/2 I don't have restrictions on tapping into my 401(k). If I chose to stay another year or two it would likely push back the date I need to tap the 401. But it's nice to know I will have in the ballpark of 30-35K a year income, before tax, coming for the next 15 years (depending on the stock market)
Few other things:
* You do pay SS tax on the full amount when earned, not in payout
* If you are one who thinks Obamacare will stick around and you can get subsidies even if you have millions of dollars, I believe this shows as income that could make you ineligible for subsidies.
* due to my maximizing NQDC and part time status, I was eligible for Roth IRA the last 2 years.