Ask Terry Questions IRA versus brokerage account

IRA versus brokerage account

By Terry Savage on May 12, 2023 | Financial Planning / Retirement

Hi Terry,
I have 3 traditional IRAs, with Fidelity, Edward Jones, and Vanguard – total portfolio value is about $275,000. I also have a brokerage account with Fidelity and a Fidelity Go account. I’m 70, and will be 71 in October. My question is this. Is it best for me to start taking withdrawals from my IRA if I need to, or from my brokerage accounts? I work part-time as a substitute teacher, and will be making another $7000 IRA contribution for the next tax year. Thanks much – I really enjoy your informative appearances on WGN

Terry Says

This is an easy question — and a tough one. You are not REQUIRED to start taking withdrawals from your IRAs (combined total) until you are age 73. Then you can take some from each account — or take it all from one account. That money will be taxed as ordinary income.

Money you take from your brokerage account might qualify for lower capital gains tax rates. So a lot depends on whether you think you will be in a lower tax bracket at retirement (since you are still working). And you don’t mention Social Security– which I hope you waited to take until your 70th birthday.

This is a perfect time to get some trusted overall financial planning advice you can trust. Start by reading this!

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