Is the reason for taking funds out of an IRA over many years to minimize the tax bite? I am retired and in th 15% bracket, but if I wait until I turn 70 and then remove all funds at that point, I'll get taxed in a higher bracket. I'm guessing that the IRS had a rare stroke of consideration and invented the idea of taking the money out in as many as 10 installments to minimize the tax in any one year. Am I right about that?
On Sat 21 May 2005 02:30:33p, William W. Plummer wrote in news:uqudnXtm-7 snipped-for-privacy@comcast.com:
With all of the familiarity I've had over the years with Quicken, I guess I still would have a difficult time figuring why each of the authors and those that supported this law did so (Though, I suspect some had their own pork barrel projects in mind and some felt guilty about the grand retirements that they had already set themselves up with.)
That being said, you can have your own reasons for how you decide to withdraw your funds from your IRA, completely different from what your congressman was thinking. It would help if you mention which version of Quicken you are running :)
If there were a million possible interpretations of the IRS's take on this; I still would not assume that they had "a stroke of consideration". The function of the IRS is to take as much in taxes as they possibly can ... and as part of that process, to make sure that everyone is deathly afraid to avoid paying their "full share". The IRS has never had any "stroke of consideration".
My guess on the rules for taking payments from your regular IRA account is that the government wants to guarantee that the government will get the maximum amount of taxes from your regular IRA: meaning that the government expects to get more in taxes that way than if you were allowed to leave the funds in your regular IRA as long as you wanted ... even until you die. One of the reasons to favor a Roth IRA over a regular IRA.
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