2007-04-12 13:42:32 · 5 answers · asked by debnmo 1 in Business & Finance ➔ Personal Finance
Assuming your mother is over 59 1/2 years old, there would not be a penalty for withdrawing from an IRA.Taxes will be due on the traditional IRA if it is withdrawn. If it is a Roth IRA, there would be no taxes due. With the CD, there will be an early withdrawal penalty if it has not yet reached maturity and taxes would be due on the interest earned. Assuming the age factor, the only other consideration would be the returns being earned on the CD and the IRA. If the CD has a better return than the traditional IRA, then the best option would be to withdraw money from the IRA.
2007-04-12 14:28:00 · answer #1 · answered by oakhill 6 · 0⤊ 0⤋
Don't really have enough info to give good help. Most likely her IRA is the better source, one reason is that she will have to begin taking funds out at some point anyway, and the plan is probably be set up to make monthly distributions. Most IRA accounts are established with this in mind. A straight CD probably pays interest at the end of certain terms, and you may not get full earnings potential if you interrupt the cycle. Good luck, hope this might help some...
2007-04-13 00:14:37 · answer #2 · answered by Blitzpup 5 · 0⤊ 0⤋
It depends on how old she is (59.5 years old there would be no tax penalty, there may be taxes). What the IRA is invested in. Then compare it to the penalty on the CD.
ALSO: Stay clear of any solicitations on Yahoo Answers
2007-04-12 23:53:56 · answer #3 · answered by Common Sense 7 · 0⤊ 0⤋
Depends on her tax bracket. Something else to consider are the madatory distributions from a conventional IRA.
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2007-04-12 21:39:54 · answer #4 · answered by SWH 6 · 0⤊ 0⤋
I would choose the one that's paying the least return, but I may not be right on this.
2007-04-12 20:51:14 · answer #5 · answered by gentleretiredworshipper 4 · 0⤊ 0⤋