roth ira withdrawls

Submitted by Sandy Rubin on Tue, 2023-06-20 13:44

I am in my 70’s and have several roth iras that have investments and cash. They were funded about 20 years ago. One is about $70,000 which includes about $13,000 cash.
if I take the cash out, will I have to pay tax on it?
if I take all the money out, what will I have to pay tax on?
When they are passed down to my chidren, will they pay tax on any of it?
Is it better to withdraw it no or have my children withdraw it when they inherit it?
thank you



Submitted by Norman Cook on Tue, 2023-06-20 14:03

It is my understanding that ROTH are NEVER taxed after 5 years.

Submitted by Alan - IRA critic on Tue, 2023-06-20 14:09

  • Since you have held a Roth over 5 years and are over 59.5, all your Roth accounts are qualified and completely tax free. Distributions to your beneficiaries will also be tax free. Form 8606 is no longer needed for reporting these distributions for you or your beneficiaries after you pass.
  • Since Roth account gains are tax free, it is far better NOT to take distributions unless you need them. There are no RMDs when you reach 73. Your children will inherit under the 10 year rule, and their only requirement after establishing inherited Roth IRAs is to drain those inherited Roths in the 10 th year after your death. Again, the longer they wait, the better.
  • If you do need to take a distribution, it does not matter whether it is from the cash (MM fund most likely) or other investments. Either way it is tax free and would only be reported on line 4a of your 1040.

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