“I’m 64 and have been retired for just over two years. I have an IRA that holds my 401(k) rollover with about $385,000. I want to start taking my monthly distributions in September and I don’t want to mess this up. How much should I take? How do I handle taxes? What if I mess this up?”
More than Money’s Mark Belcak consulted with MtM’s Tax Expert Diane Dickison to answer this gentleman’s question. First, relax. You are highly unlikely to ‘mess this up.’
One of the great things about receiving IRA distributions is they are not set in stone. You can change your mind, change the amounts, change the tax status, change just about everything multiple times until you get it just the way you want it. Income taxes? Most IRA custodians will withhold an appropriate amount for federal income taxes (check with your income tax professional for the correct amount for your situation). The state of Pennsylvania does not tax IRA distributions (check with your tax professional for other tax rules in other states).
How much should you take? It depends. It depends on how much you need. It depends on your other financial assets. It depends completely on your personal circumstance. Consult with a professional financial advisor who will guide your thinking to the conclusion that best benefits you.
If you have questions or comments, please send them to Gene@AskMtM.com