Distribution from IRA

[artbuc]

What is the name of your state (only U.S. law)? PA

I am 62. I have a traditional IRA which was funded by a direct rollover of a 401(k) after I retired. At the time of rollover, 20% was after-tax and 80% before-tax. Today it is 15% after-tax. As I understand it, the after-tax and before-tax funds are now fully fungible and I am not allowed to withdraw only after-tax funds. My understanding is that a percentage of any withdrawal will be taxable and that percentage is the same as the percentage of taxable funds in the IRA which is 85% in my case.

Is my understanding correct? Thanks.

 

[tranquility]

While I'm uncertain as to the "traditional" nomenclature, you are correct. Your basis will be over your total amount in all IRAs to get a fraction which will be excluded from being taxed. You don't get to choose which funds to draw from regarding taxability.

 

[artbuc]

While I'm uncertain as to the "traditional" nomenclature, you are correct. Your basis will be over your total amount in all IRAs to get a fraction which will be excluded from being taxed. You don't get to choose which funds to draw from regarding taxability.

Thanks. By "traditional" I mean:

http://www.irs.gov/retirement/article/0,,id=137283,00.html