# Choosing an IRA vs. a non IRA during settlement?



## WestMonroe91 (Feb 28, 2014)

During a settlement phase, let's say there is an equal IRA and non-IRA mutual fund. They both have $75K. Would it be beneficial for a 60+ year old to select one over the other when given first pick instead of splitting both?


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## Borntohang (Sep 4, 2014)

All the money in the IRA we be taxed at Ordinary Tax Rate. The "gains" in the non IRA will be taxed at Capital Gains Rate


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## Wolfman1968 (Jun 9, 2011)

Borntohang said:


> All the money in the IRA we be taxed at Ordinary Tax Rate. The "gains" in the non IRA will be taxed at Capital Gains Rate


Unless it's a Roth IRA, in which case the taxes would have already been paid when the money was deposited, and all gains are tax-free.

It may also depend on how much other income you would anticipate having at the time of withdrawal from the IRAs, which affects your tax bracket/rate for ordinary income. You would then have to compare it to the capital gains rate which you would expect to be in force at the time you withdraw.


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## WestMonroe91 (Feb 28, 2014)

Wolfman1968 said:


> Unless it's a Roth IRA, in which case the taxes would have already been paid when the money was deposited, and all gains are tax-free.
> 
> It may also depend on how much other income you would anticipate having at the time of withdrawal from the IRAs, which affects your tax bracket/rate for ordinary income. You would then have to compare it to the capital gains rate which you would expect to be in force at the time you withdraw.


No, it is not a Roth IRA and I expect that my other income at the time of withdrawal while in retirement to be low. But taking in to consideration what is explained above, it seems that the best bet is to choose the non-IRA because only the long term gains will be taxed.

Thanks


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## WasHappyatOneTime (Nov 26, 2012)

I'd have a chat with my accountant about it.


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