Q) I am 78 yrs old, I have a ROTH IRA and plan to cash it out, will this be considered an income, subject to tax. Will it increase my gross income and bump me to the next taxable bracket?
A) No, you will not have to pay taxes on your Roth IRA withdrawals if you are 78 years old or older. This is because you have already paid taxes on the money that you contributed to your Roth IRA. You can withdraw your contributions at any time without penalty. You can also withdraw your earnings without penalty if you are 59 ½ years old or older and you have had your Roth IRA for at least five years.
However, if you withdraw your earnings before you are 59 ½ years old, you may have to pay a 10% early withdrawal penalty. You may also have to pay taxes on your earnings, depending on your income.
If you are considering withdrawing money from your Roth IRA, you should consult with a tax advisor to make sure that you understand the tax implications.