Retirement Planning/Ira contribution, taxable?


If I contribute to my Ira from my savings, will I be taxed on that when I withdraw it later?  I'm a bit confused, because being that the money in my savings account would have been taxed already from my paycheck, then if its taxed again later that's double taxation.  I'm I missing something?

Thanks you

Dear Thomas,

You can only make qualified IRA contributions backed by employment related earnings. Thus, if you are transferring funds from a savings account to an IRA, it is presumed that this is associated with personal income. This is the only way the contribution could be considered as deductible from current income.

On the other hand, if you are making a non-deductible contribution to your IRA, you are going to need to differentiate what distributions are taxable and which are non-taxable. This is not good strategy, and not necessary. There is a better way to build your retirement.

Willard R. Brumbaugh, LUTCF
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Willard R. Brumbaugh, LUTCF


I have answered many questions regarding 401ks, IRAs and annuities as well as life insurance. I have been counselling against most Qualified Plans since 1994.


Ranked in the top 5 in retirement catagories at most of its last 2 1/2 years. Organizations I belong to: National Association of Insurance and Financial Advisors-California
Inland Empire Estate Planning Council

Life Underwriters Training Council Fellow

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