Withdrawals of IRA money should be done with precision; DOLLARS & SENSE


I'll be 70 1/2 next year and I'll be having to take money out of my IRAs. The problem is, I have them in four different banks.

Now, what I would like to do is to be able to remove the [money] from the bank with the lowest interest. I understand I could probably do it as of December of that year.

L. B., Warwick, R.I.

Good strategy!

As you know, you must start to pull money out of your traditional Individual Retirement Account (IRA) by April 1 of the year following the year in which you reach age 70 1/2.

(For reasons spelled out here before, it's probably not a good idea to wait until the last minute to make your first required minimum withdrawal; you may want to make it in the actual year in which you turn 70 1/2. This can help limit the tax impact.)

What if you have more than one IRA?

To figure out how much, at a minimum, to withdraw, you must add up all the amounts in all your IRAs, said Barbara C. Shuckra, spokeswoman for the Internal Revenue Service.

However, you don't have to withdraw money from each IRA; you may make the required minimum withdrawal from just one IRA if you want.

Which one? You said it best: Pull money out of the one that's earning you the least. That way, the rest of the money in your other IRAs can continue earning on a tax-deferred basis, at the higher rates.

For more information on how to figure your minimum required withdrawals, see IRS Publication 590, "Individual Retirement Arrangements."

For your free copy, visit your local IRS office, or call the IRS at 1-800-829-3676. If you have access to the Internet, you may read or download a copy from the IRS' World Wide Web site:

http: //www.irs.ustreas.gov

Pub Date: 10/10/99

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