With a traditional IRA, however, your entire distribution would be taxed at your marginal tax rate for ordinary income. Long-term capital gains tax rates, which are applicable when the asset is held for a year or longer, are much lower than those for ordinary income, topping out at You can open a self-directed IRA with any brokerage. Stocks also grow IRAs through dividends and increases in the share price. Any comments posted under NerdWallet’s official account are not reviewed or endorsed by representatives of financial institutions affiliated with the reviewed products, unless explicitly stated otherwise. As the name implies, the best time to take money out of an Individual Retirement Account IRA complies with a smart withdrawal plan. Investments and income in traditional IRAs and k s can grow tax-free which includes being free of capital gains taxes , but as soon as you take the money out, you’ll be required to pay income taxes on it.