How Much Annually Can I Take Out of My IRA?

You must balance several factors in deciding on IRA retirement withdrawals.

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When you retire, you will confront the question of how much to take out of your individual retirement account, or IRA, each year. There’s no limit to how much you can withdraw from your IRA annually – it's a question of how much to need to take out. You want to take out enough for your current needs while keeping enough back so that you don’t outlive your retirement funds. In determining the amount, you have to balance a number of factors. Various websites offer online calculators that can help your decision.


If you're between age 59 ½ and 70 ½, you can take out however much from your traditional or Roth IRA as you'd like. At age 70 ½, minimum required withdrawals come into effect for traditional IRAs, and you can calculate the minimum amount using data from the IRS.

IRS Withdrawal Rules

The Internal Revenue Service gives you wide latitude in determining how much to withdraw from your IRA. The IRS rules on retirement withdrawals from your IRA don’t set any specific required amount of annual withdrawals between age 59 ½ and 70 ½. You can take out as much or as little as you like. If yours is a traditional IRA, you will owe income tax on your retirement withdrawals. If yours is a Roth IRA, your withdrawals are tax-free.

Minimum Required Withdrawals

Owners of a traditional tax-deferred IRA must start taking an annual minimum withdrawal when they reach age 70 ½. If you don’t take the minimum, you get socked with a 50 percent penalty tax on the amount you were supposed to have withdrawn. You figure the annual minimum by dividing your IRA balance by how long the IRS expects you to live. You can take more than the required minimum.

For example, if you had $300,000 in your IRA at age 70 ½, you divide that sum by the 26 more years the IRS expected you to live. You would have to withdraw $11,500 annually and pay income tax on that amount. If you have a Roth IRA, there is no minimum withdrawal requirement.

Lifestyle Choice in Retirement

In deciding how much to take out of your IRA, you should consider the lifestyle you want in retirement. Whether you plan extensive retirement travel, pursuing a new hobby or sport, acquiring a vacation home or other activities, you need to put a price on your retirement vision. You also need to evaluate your health and allow for medical expenses as you age, and you should assess your chances of living to age 96 or beyond.

Another factor is how well your IRA investments are doing. You should look at how much your investments are likely to add to your nest egg.

Your Other Financial Resources

Another factor in determining how much to take out of your IRA is your retirement income from other sources, such as Social Security, a company pension or part-time work. If you retired at age 66 with $300,000 in your IRA, needed $50,000 a year to support your retirement lifestyle and received $25,000 in income from all your other sources, you would need to take $25,000 a year from your IRA.

If your IRA investments earned an average of 5 percent annually, your $300,000 IRA would last you 19 years, to age 85. But if you lived to age 96, for example, you would outlive your IRA by 11 years and suffer a 40 percent cut in your income in that final decade of life. To make your IRA last until age 96, you could only take out $19,000 a year, meaning you would need to reduce your spending or increase your other income sources to cover that possibility.