Is there a reason not to deplete an IRA account as soon as possible after retiring.?

Question

closing IRA and putting money in an regular account.

Answer 1

If you withdraw the $ and keep it in a regular account, as you put it, it becomes taxable each year. Keep it in the IRA and it remains tax-deferred. If you don't need it, leave it where it is, or roll it over to another tax-advantaged acct.

Answer 2

You have to be old enough to withdraw funds without a penalty, so be sure you meet the age requirement. Also consider the tax benefits of funds accruing in ira invenstments. If you have any benefits from your former employments such as deferred compensation, you may want to wait until those are depleted (for tax purposes again).

Answer 3

Assuming you are retirement age & this is a regular IRA (not a Roth):

It could make other income taxable (if it would not have been), or raise your tax percentage.

For example, when added into your other income it could make some of your social security taxable.

Answer 4

It depends how old you are when you retire. There are tax consequences for different ages.

Also, certain types of IRAs require that you take a yearly disbursement of funds.

Answer 5

its taxable income in the year you withdraw it. If that doesnt hurt your tax situation, assuming youre 59 1/2 years old, then no. No particular reason for you to do that though, it should be accessible to you anyway.