After you retire and the paychecks stop coming, you may need to tap your investment portfolio for spending money. Assuming you hold investments both inside and outside a retirement plan, you probably will want to tap your taxable accounts first and let your IRA continue to grow untaxed.
However, if you have relatively low taxable income (in 2002, under $47,000 on a joint return), you may want to take out enough money from an IRA to use up your 15 percent tax bracket. In the future, IRA withdrawals may be taxed at much higher rates.
Thus, if you’re married with an estimated $35,000 in taxable income this year, you might want to pull out about $12,000 from your IRA. That money will be taxed at only 15 percent.
