[Nancy St John]

I turned 65 in August. I am still and will continue to work. I hope till I am at least 70.

Now that I am 65 I would like to make a 6,000 deduction from one of my accounts.
Is it better to make the withdraw from the 401K or my Ira accounts?

[ebaines]

Hello Nancy. If you're talking about a traditional IRA funded with pre-tax dollars, it doesn't really matter whether you pull from the IRA or 401(k) - you'll pay ordinary income tax on the distribution regardless. However, if you have a Roth IRA your withdrawal can be tax-free ( as long as the account meets the 5-year holding rule). Similarly, if either your traditional IRA or 401(k) were funded with a significant amount of after-tax dollars (i.e. you made contributions that were not deductible at the time) you can reduce the amount of income tax you pay on the withdrawal by taking the funds from the account with the higher proportion of after-tax contributions. On other thing to consider is potential estate planning implications - specifically if the two accounts have different beneficairies you should take that into account.