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You can withdraw funds from an IRA after the the age of 59 1/2 penalty-free, but you still have to pay ordinary income tax in the year of the withdrawal. At 70 1/2 a new set of rules kick in. In that year the Custodian of the IRA will provide you with a form in which you will have to choose one of the three options for manditory withdrawals for future years. The calculation will be based on the valuation of your IRA on DEC 31st of the prior year, you become 79 1/2. You need to discuss the options with your Custodian because once they are made they are irrevokable! There is an excellent series of articles on IRA's being run currently by a TMF, you should take a look at it. - Matthew
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