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I'm 62, single and have about $8,400 in an IRA and receive a disability pension of about $15,000 per year. I also just started social security in October, which translates to $1,200 per month. I'm planning to close my IRA this year, but I'd like to know if it's better to wait until next year?


The BIDaWIZ Team's Answer:

The answer to your question is highly dependent upon your taxable income in 2013 versus 2014. However, given the facts and circumstances that you've provided, it will be more tax effective to withdraw this year as your taxable income is lower this year than in next year. It appears as though you will only have to report $3,600 in social security income since you elected to do so at the end of the year. This compares to $14,400 in social security income which will be factored into you taxable income.

The BIDaWIZ Team



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