Are IRA Distributions Taxed as Regular Income?

Shawn Plummer

CEO, The Annuity Expert

Understanding IRA Distribution Taxation

Yes, IRA distributions are taxed as regular income. When you withdraw money from a traditional IRA, the distributions are included in your annual taxable income. This is because contributions to traditional IRAs are often made with pre-tax dollars, and the tax is deferred until withdrawal.

Examples of IRA Distribution Taxation

  1. Withdrawal at Retirement Age: If you withdraw $50,000 from your IRA at age 65, this amount is added to your taxable income for that year.
  2. Early Withdrawal: Taking out $10,000 before age 59½ is taxed and may incur a 10% penalty.

IRA Distribution Tax

Age of WithdrawalAmount WithdrawnTaxable IncomeAdditional Penalty
Under 59½$10,000Yes10%
59½ or Older$50,000YesNone


Withdrawals from traditional IRAs are taxed as regular income. It’s important to plan for these taxes in your retirement strategy. Contact us today for a free quote.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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