When can I draw money from IRA acct ? I will turn 70 in 4 mo.

Forum|Forum|1 year ago
September 29, 2024
4 replies
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I want to draw $10000.00 from my IRA acct so I want to know the rules about this.

Best answer by dmertz

There is no restriction on when you are permitted to take a distribution from an IRA. As Bsch4477 indicated, what you need to be concerned about is what your income tax liability for the distribution will be.

If the distribution is from a traditional IRA and you have no basis in nondeductible traditional IRA contributions, the entire $10,000 will be taxable income that adds to your AGI on Form 1040.

Bsch4477

Employee

You are eligible to make withdrawals without penalties or fees from a traditional IRA at age 59½. If an IRA that you made deductible contributions you would be taxed at your marginal tax rate.

Anonymous_

Employee

No text available

dmertzAnswer

Employee

If the distribution is from a traditional IRA and you have no basis in nondeductible traditional IRA contributions, the entire $10,000 will be taxable income that adds to your AGI on Form 1040.

Opus 17

Employee

An IRA is your own money. You may withdraw any amount at any time for any reason. If this is a traditional (pre-tax) IRA, the money will be taxed as ordinary income, and if you are under age 59-1/2, there is a 10% penalty for early withdrawal unless you meet an exception. But you can withdraw any time you want.

Once you reach a certain age (73 in your case), you are required to withdraw at least something each year. This is called a Required Minimum Distribution (RMD) and the reason is that you are not supposed to leave all this tax-free money for your heirs, you are supposed to spend it during your own retirement. RMD is based on statistical life expectancy. So if your statistical life expectancy when you turn 73 is 20 more years, you must withdraw at least 1/20 of your IRA that year, then 1/19th in the year you turn 74, and so on. However, you can always withdraw more if you want to, and you can withdraw before your RMD beginning age if you want to.