Traditional IRA Withdrawal question

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rambojuda13
Posts: 4
Joined: Mon Apr 10, 2017 2:11 pm

Traditional IRA Withdrawal question

Postby rambojuda13 » Wed Apr 19, 2017 2:30 pm

Hello,

I am 59 years old and i have just started contributing. I have created a Traditional IRA account and contributed (6500 + 6500) 13,000 total for me and my spouse for the year of 2016. I plan to do that for the next 3-4 years.
I read that the money has to be in the account for 5 years before i can start taking distributions. My question is, Lets say i contribute as follows:
2016 -- 13,000 (Contributed before filing tax in April 2017)
2017 -- 13,000
2018 -- 13,000
2019 -- 13,000
2020 -- 13,000
2021 -- 0
2022 -- 0

So by 2020 i will be 64. Will i be able to withdraw at this stage. If so will i have access to the entire amount or just the amount that was contributed in 2016 i.e 13,000 plus some gains.

DSInvestor
Posts: 10446
Joined: Sat Oct 04, 2008 11:42 am

Re: Traditional IRA Withdrawal question

Postby DSInvestor » Wed Apr 19, 2017 2:38 pm

There is no 5 year clock for Traditional IRA contributions.

Chip
Posts: 1359
Joined: Wed Feb 21, 2007 4:57 am

Re: Traditional IRA Withdrawal question

Postby Chip » Wed Apr 19, 2017 2:40 pm

As DSInvestor said, for a traditional IRA there is no 5 year rule. That's only for Roth IRAs.

So you can withdraw without penalty once you turn 59.5. You will pay income tax at ordinary income rates on all contributions that were deductible when you made them, plus on all the earnings in the account.

JohnFiscal
Posts: 386
Joined: Mon Jan 06, 2014 4:28 pm
Location: USA

Re: Traditional IRA Withdrawal question

Postby JohnFiscal » Wed Apr 19, 2017 2:40 pm

DSInvestor wrote:There is no 5 year clock for Traditional IRA contributions.


agree. The 5 years applies only to Roth IRAs and has some special provisos even then.

dbltrbl
Posts: 771
Joined: Thu Mar 01, 2007 11:52 am

Re: Traditional IRA Withdrawal question

Postby dbltrbl » Wed Apr 19, 2017 2:44 pm

+1 As said before you are over 59.5 years old so no 5 years rule. 5 Year rule is for ROTH IRA Only.
Last edited by dbltrbl on Thu Apr 20, 2017 1:06 pm, edited 1 time in total.

rambojuda13
Posts: 4
Joined: Mon Apr 10, 2017 2:11 pm

Re: Traditional IRA Withdrawal question

Postby rambojuda13 » Wed Apr 19, 2017 2:45 pm

Thank you all, that answers my questions.

TBillT
Posts: 175
Joined: Sat Sep 17, 2011 1:43 pm

Re: Traditional IRA Withdrawal question

Postby TBillT » Thu Apr 20, 2017 1:04 pm

Furthermore from posts here, I gather the 5 year rule on Roth IRA is often not too much of a burden the way they do it, you can generally take a lot out before that.


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