Taxation on Retirement account

If retirement account has been funded with after tax money, the cost basis will be tax free withdrawal. Example:
Rose owns a traditional IRA and has made $3,000 in nondeductible contributions to the plan for the past 20 years. When she reaches age 60, she decides to retire and take a lump-sum distribution from her IRA. She can recover an amount equal to her cost basis ($60,000) tax free; the remaining amount will be considered interest earnings and will be subject to ordinary income taxation.

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