Minimum Required Distributions

[Charlie L]

So I am 70 and have a small ira   and am now on a fixed income (retirement Pension)

would it be a good idea to start removing the capital now    as it is in a CD and not making much   taking smaller amounts will not put me in a Higher tax bracket  

My thought is to just start taking it and pay the taxes now so when the Government starts looking at me i will have it all gone by then

[Opus 17]

If you are in a position where you can remove money without paying tax, but you don't need to spend it right away, you would be better off converting those amounts to a Roth IRA.  That way, it can continue to grow, and you don't pay tax when you do need to spend it.  If you withdraw the money and leave it in a mattress, you earn nothing and it loses value due to inflation, and if you withdraw the money and then invest it back in CD or other investments, you will still eventually pay tax on the interest, dividends or capital gains. 

[Charlie L]

i would still have to pay tax on it when i took it out    how can i find out more about converting to a Roth account

[Opus 17]

Well, you're saying "taking out will not put me in a higher bracket" so I suppose its a matter of timing.

You are probably paying 12% or 22% now.  Do you think rates will go up or down?  Do you think you will need to withdraw more or less for living expenses in the future?  

Suppose you are in the 12% bracket and you could withdraw $5000 more before you are bumped up.  You withdraw and pay the tax, and invest in something else where you have to pay tax on the interest and dividends, or you convert to a Roth and pay the tax, but never pay tax again on any future gains within the Roth IRA.  That means you can withdraw it later without bumping your tax rate.  Rates are scheduled to go back up to 15% in 2026, converting at 12% now would save money.  But if a different Congress lowers rates, you might have been better off waiting.  You need a crystal ball, or maybe an investment advisor.

Here is an article on Roth conversions.

https://blog.turbotax.intuit.com/taxes-101/taxes-101-ira-conversions-1946/