My 89-year-old father lives on Social Security and his pension. He has approximately $60,000 in an IRA, which he draws from as needed for home repairs, emergency expenses and taxes. This year, he’d like to take money from his IRA to give $5,000 to each of his five grandchildren. We’re concerned that these withdrawals will count as income, causing him to be taxed. What should he do?

Taxes aren’t the only reason for concern here. Your father is proposing to give away more than he can afford. He should find another way to show his grandchildren how much he loves them.

Withdrawing this money from his IRA would indeed increase his taxable income by $25,000 this year. This could push him into a higher marginal tax bracket, disqualifying him for tax breaks that phase out as income rises. Higher income might also subject his Social Security benefit to a bigger tax bite and boost his future Medicare Part B premium.

More importantly, this $25.000 represents almost half your father’s savings — money he relies on to pay for home repairs, emergencies and taxes. From what you say, he’s still living independently, which is wonderful. But even if his health remains excellent, his future expenses are more likely to rise than to fall. He may incur new expenses (like the cost of daily help or installing a stair lift) to ensure his continued comfort and safety in his own home.

“There are practical, enjoyable ways to have a lasting impact on his grandchildren that won’t endanger his own survival, like taking them to the movies or to baseball games,” says Ed Slott, a Rockville Centre tax accountant. “Those are experiences they’ll always remember.”

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THE BOTTOM LINE It’s a mistake to give away more than you can afford.

WEBSITES WITH MORE INFORMATION

ssa.gov/planners/taxes.html

medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html