Ira rollover choices.
I am a senior. Need to roll over IRA. Should funds be withdrawn to pay off car or credit car balances?
Terry Says
Well, that depends on your age and other assets. When you withdraw funds from an IRA it is considered ordinary income — And you’ll owe taxes. AND, it could put you in a higher tax bracket, as well as increasing your Medicare Part B and D monthly premiums!
I don’t know your age, or your entire financial picture, including your other income. It does make sense to pay down high-rate credit card debt, but less sense to pay off the car loan. When you go to get your taxes done, you can ask them about the impact of a withdrawal on your tax bracket.
Read the new article on Seniors and Taxes on my website.
