Ask Terry Questions What accounts to withdraw money from

What accounts to withdraw money from

By Terry Savage on April 15, 2015 | Financial Planning / Retirement

Hi Terry,
I wrote to you previously but I want to add information to my question (I haven’t received a response from you yet when I emailed you previously). I am age 70 years old, retired and have had a Roth account for more than 5 years.
Is it better to withdraw money from a Roth account (keeps growing tax free), or from a taxable account and pay taxes?

Terry Says:  Well, if you have a “traditional” IRA or 40l(k) plan you will be REQUIRED to withdraw starting next year!  (You must start withdrawing in the year after you reach age 70-1/2.  Read a recent column in my archives about MRDs — minimum required distributions.)  If you don’t need any extra money beyond those required distributions, then let your Roth continue to grow tax-free!   (And be sure to tell your Roth beneficiary not to take the money out when the time comes;  instead he/she should let the money continue to grow tax-free for many more years.)

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