When you have money in a traditional IRA you will eventually pay tax on the amount when you start to make withdrawals. At age 72 you will need to make RMD (required minimum distributions) from your traditional IRA.
One option is to start to contribute after tax money to a Roth IRA if you meet the income requirements. When you take a distribution from a Roth IRA the distribution amount is not taxable income. Roth IRA distributions are not taxable income. Another option is convert money from a traditional IRA to a Roth IRA. However you will need to pay tax on the amount that you converted in the year of the conversion. You will not need to pay tax on the appreciation on the Roth IRA when you make distributions. You would need to decide if it is beneficial to you to make this conversion.
Hope this helps!
AnthonyC CPA
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
