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Step 1
Withdraw IRA funds only after you are 59 1/2 years old. The combination of the funds withdrawn and the 10 percent early withdrawal penalty will significantly reduce future retirement income.
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Step 2
Take the minimum distribution by April 1 in the year after you turn 70 1/2 years old on a regular IRA. There is a 50 percent excise tax on the minimum amount not distributed.
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Step 3
Convert from a regular IRA to a Roth IRA in a tax year where you have low taxable income and the tax on the regular IRA distribution will not be significant. Future earnings and distributions from the Roth IRA after five years will not be taxed and there are no minimum distribution requirements.
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Step 4
Reduce any withdrawal from a regular IRA by the nondeductible IRA contribution made in prior years. Use IRS Form 8606 to compute the amount excludeable from taxable income.
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Step 5
Continue to contribute to your IRA if you have qualifying compensation until you are 70 1/2 years old, even if you are receiving social security benefits.










