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Angela is 70 years old, and has accumulated $1,750,000 in her ROTH IRA. She wants to...

Angela is 70 years old, and has accumulated $1,750,000 in her ROTH IRA. She wants to withdraw all $1,750,000 this year in order to buy a French chateau to live in during her golden years, and is concerned about the tax consequences. How much will she have to pay in taxes when she withdraws this money from her ROTH IRA if her marginal tax bracket is 32%?

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Answer #1

Age 59½ to 70.

Withdrawals from a Roth IRA if you've had less than five years.

If you haven’t met the five-year holding requirement, your earnings will be subject to taxes but not penalties.

Withdrawals from a Roth IRA you've had more than five years.

If you’ve met the five-year holding requirement, you can withdraw money from a Roth IRA with no taxes or penalties.

So here if she has fulfilled 5 years condition, then there will be no taxes

If she has not fulfilled 5 year condition, then there will be taxes @ 32%.

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