At 68, Tapping a $1.2 Million IRA First Could Cost $45,000 in Forced Withdrawals

Quick Read Taxable account gains face 15% capital gains tax. IRA withdrawals are taxed at 22% ordinary income rates on the full amount. Spending taxable accounts first shrinks the IRA before RMDs start at 73. This prevents IRMAA surcharges and higher tax brackets. Heirs inherit taxable accounts with stepped-up basis and pay no capital gains tax. IRA beneficiaries pay ordinary income tax on withdrawals. A recent study identified one single habit that doubled Americans’ retirement savings and moved r ...