Come to think of it, since you are over age 59½ you could do a taxable distribution from the and a new $2,000 contribution to a traditional IRA as long as you have not yet reached the year in which you will reach age 70½, you have sufficient compensation (generally income in box 1 of a W-2 minus any amount in box 11 or net earnings from self-employment) and this contribution plus any other IRA contribution you make for the year does not exceed the annual contribution limit. This would avoid any concern about the rollover limitation I mentioned in my earlier answer. The distribution and new contribution will offset as long as you are eligible to deduct the IRA contribution; deductibility is determined by your modified AGI and whether or not you or your spouse is covered by a workplace retirement plan. If the contribution is nondeductible, a portion of any future traditional IRA distributions will be nontaxable until all of your traditional IRA funds have been distributed and your basis in nondeductible traditional IRA contributions is fully recovered.
