Withdrawing from a traditional IRA

[streetwolf]

I'll make this succinct. I am able to withdraw around $20,000 from my traditional IRA Vanguard account without paying any taxes due to my financial situation. I'm thinking that I should withdraw this amount and transfer it to my Vanguard Brokerage account (not an IRA, but has the same portfolio as my IRA). Result; no tax and my $20,000 goes into an identical account.

Does this sound like the right thing to do?

[fanfare]

The right thing to do is to convert the $20,000 into a self - directed brokerage Roth IRA.

That money and any growth you achieve will be tax free.

Note: all new Vanguard accounts are brokerage accounts now.

@streetwolf 

[Opus 17 · Accepted solution]

You are better off converting the IRA to a Roth IRA (whether self-directed or not).  As a brokerage account, you will still pay taxes on interest, dividends, and capital gains whenever you sell.  As a Roth IRA, you will pay no taxes on interest or dividends and no taxes when you withdraw the money.

[VolvoGirl]

What I’ve been doing is making QCD distributions even though I don’t need to take the RMD yet.   Oh but you need to be 70 1/2.   I have Vanguard IRA too.