Withdrawing Money from an IRA

By Last Updated: December 18, 2019

Question

I have an IRA which holds $100K and would like to withdraw some of it to buy a new home. But, I am also collecting Social Security and wish to understand the possible tax consequences of IRA withdrawals. How would my tax situation change?

Answer

Over the age of 59 1/2, withdrawals from IRAs are taxed at your standard income rate. If your only income is social security, your taxable rate could be low, as your Social Security is probably not taxed. If you have other sources of income (pension, etc.) then you would add your withdrawal to your total income and pay the Federal and State tax rate where your new income total falls. It is important to have taxes taken out when you do the withdrawal to prevent a surprise next April.  You can base your tax off the most recent IRS tax table here. You don’t want to take out too little in taxes and then owe more money when you file your tax return.

An IRA withdrawal should not decrease your Social Security payments if you are under your full retirement age, only wages and salary income will do that, HOWEVER, it is likely that a part of your social security could become taxable. This is all very general information. To truly determine your taxed owed, if any, I suggest doing some tax planning with a Certified Public Accountant (CPA).

Have more questions? Email us at info@wiserinvestor.com or use the Contact Us page.

Share This Story, Choose Your Platform!

Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.

Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.

To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.

Sign up for our newsletter!

Our latest blogs, podcasts, and educational videos delivered to your inbox weekly.