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Which contributions come out of my IRA first?

March 31, 2013: 3:17 PM ET

I put tax-deductible and nondeductible money in my IRA. What comes out first? — Duane Hoffmeyer, Mesa, Ariz.

Most money in traditional IRAs comprises tax-deductible contributions and any account earnings over the years, all of which is taxable when you pull the money out. You evidently also made nondeductible, after-tax contributions, which exit your IRA tax-free.

To answer your question, the funds come out simultaneously. Add up your after-tax contributions. The percentage of your account they come to is the percentage of your withdrawal that isn't subject to taxes. Have more than one traditional IRA? You must use the total of all their values to calculate your liability, even if you're pulling money from only one account. And to be ready for your next withdrawal, keep track of how much of your nondeductible contributions you've already removed.

— Walecia Konrad

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