I have a question for you: I have two (reg.) IRA’s and am 67 yrs. old, am retired with a part time job that suppliments my SS check. I know at age 70 1/2 I’ll have to start taking yearly distributions on my money and pay taxes and I am just a little worried. I am pretty certain there is no other way to get out of paying the taxes. Taking some money out now at 67, paying taxes on it @ tax time and putting the money in a roth wouldn’t do any good tax-wise would it? Is it true I can only deposit in the roth what I earn in that yr., which is $3,500 or so. Do you have any suggestions for me? Rose, Elgin, Il.
SAVAGE SAYS: Don’t start worrying about required minimum withdrawals yet. Right now, the best you can do is try to live within your income, and save any money you can. In the year in which you will reach age 70-1/2, go to one of the “custodians” of one of your IRAs. They will help you calculate the minimum required withdrawal — but you must tell them the balances in ALL your IRA accounts. You can then take the money out of one, or several accounts — as long as you take the minimum required. I know it sounds confusing , but it will all become clear when the time comes.