I am 78 years old. Can I draw all my money out of my Individual Retirement Account (IRA)? What is the maximum I can draw out?
“Yes, at 78 you are free to take all of the money from your IRA,” said FPA member Jim MacKay, CFP®. “However, this should be done only after careful consideration. First, there are potential tax consequences that could reduce the net amount available to you. For instance, with a Traditional IRA, distributions are generally taxable as income in the year you take them. This could result in a larger tax bill to the IRS than you were expecting. Secondly, you should consider what other resources you have to support future income needs before depleting an IRA. Not knowing your complete situation, I can’t advise specifically, but be sure to account for the future years when you might need income and plan for where that income might come from. Once you take money from your IRA, it can only be returned under special circumstances, so be certain you are comfortable with the decision first.
“My answer is, of course, based on limited information. I have not considered every available alternative, and a financial planning engagement has not been entered in to.”