Withdrawals at Age 59.5

[Lienlord]

DW and I will be turning 59.5 in a few months, when we would like to start drawing some dividends & interest from our tax-deferred accounts at Schwab.

Do we need to wait until after the exact dates we turn 59.5, a day later, or does it really matter since it all gets reported as a total amount for the year?

Is Schwab or Uncle Sam keeping track of the exact date we turn 59.5?

 

[walkinwood]

You should wait till you're 59.5.


We got 2 1099-Rs for IRA withdrawals (Roth transfers) the year that we were 59. One for the withdrawal before 59.5 and one for the withdrawal after. They had different "Distribution codes"

 

[pb4uski]

Not enough details to know but if you still have headroom to do low tax cost withdrawals you might not want to limit yourself to withdrawing just dividends and interest. If what you can do in low tax cost withdrawals is more than what you need for spending you can always either make those withdrawals Roth conversions so future growth and income is tax-free or invest the excess in a taxable brokerage account.

In other words, don't let any headroom to do low tax cost withdrawals or conversions go to waste!

Especially now that withdrawals are penalty free.

 

[SecondCor521]

I would wait until a day or two after the day I turn 59.5, just to be safe. My birthday is May 26th, so I would wait until November 28th or so.

And yes, Schwab knows exactly how old you are and will report distributions separately if necessary as noted above.

 

[Koolau]

Yeah, give yourself a few days - just in case.

 

[MRG]

You should wait till you're 59.5.


We got 2 1099-Rs for IRA withdrawals (Roth transfers) the year that we were 59. One for the withdrawal before 59.5 and one for the withdrawal after. They had different "Distribution codes"

Exactly!
Your service provider will keep track of that. They have your birthday and know how to add 59.5 years to it. Dates are a PIA to add together but trust me it's accurate.

 

[Blue Poles]

It's also a leap year, so there is one more day of waiting with anticipation for that sweet, sweet money.

 

[DrRoy]

Yeah, give yourself a few days - just in case.

+1