Tax consequences of liquidating ira

Because these decisions can be complex, it is wise to seek qualified tax and legal advice.

Also, bear in mind that IRA withdrawals increase your adjusted gross income, or AGI, which cause increased taxation of Social Security benefits. For example, if you had ,000 in IRA withdrawals and ,000 in Social Security benefits, none of your benefits would be taxable and you would owe no income tax.

This is because the IRS rules state that if you have income in addition to your Social Security benefits, you add half the Social Security benefits to your other income.

In this example, you are still under the IRS federal tax limit.

So by the time you actually enter retirement, you may have both taxable and tax-deferred resources.

To make the most of your money, does it matter which assets you sell first to create retirement income?