Re: IRA Withdrawal and Taxes
Quote:
Quoting
johnb123
After I turn 59 1/2 can I still contribute to my IRA and use it as a trading account, so I don't have to keep track of my trades for tax purposes?
From your other threads, it does not appear that you have the qualifying income to contribute to an IRA.
http://www.irs.gov/publications/p590...link1000230355
Re: IRA Withdrawal and Taxes
Thank you....I was thinking once I turned 62 and started receiving Social Security....but that would not qualify as "earned income".
Re: IRA Withdrawal and Taxes
Earned income is any income that you have to get out of bed and go to work to receive. If you can sit around the house all day in your bath robe drinking coffee and watching the Price is Right, and still get the money, it's not earned income. i.e. you don't have to perform work to get it.
Just for grins, I'll mention that you can take money out of the IRA and use if for 59 days before rolling it over into another IRA. So prior to turning 59 1/2, you could do that and then put the money into the rollover IRA on the 60th day (your half birthday presumably). Then you can take distributions from it without penalty. If that helps you at all.
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Oh, and one more thing. If you are taking money out of your IRA in substantially equal amounts each year at a rate based on the actuarial tables for your life expectency, then you can take it out without penalty. In other words, you can use it as an annuity, taking out an equal amount each month over the 320 months (or however many) of life expectancy you have left and you would not pay a penalty. You can do this at any age.