Ask Terry Questions Ira withdrawals and tax brackets

Ira withdrawals and tax brackets

By Terry Savage on August 15, 2017 | Taxes & Economy

I am 67 and retired 2 years ago. I am living on SS and savings so far. I paid no income tax last year. Can I start to take money out of my ira without paying tax. What is the maximum total income before you pay federal tax. Thanks Ken

Terry Says

Yes, this is the time to -- slowly -- start taking money out of your IRA.   Tax brackets are adjusted annually.  For 2017, single people earning less than $9325 will pay a 10 percent tax rate.  Income for singles above that amount, and up to $37,950 pays a 15% tax rate.  If all you have is Social Security income, it should be pretty easy to stay in the 15 percent tax bracket for this year. And likely it won't be too different for 2018.  But be sure to include ALL income, and remember that IRA withdrawals are considered ordinary income, to be added on to your SS income. One more thing:  This is the time to make sure that your IRA is invested in cash only -- or money market deposit accounts, but not stocks or stock market mutual funds.  You are not in a position to lose even one penny in the stock market!



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