You can withdraw from a Roth IRA as follows:
- You can withdraw your contributions (the money you put in) at any time, tax- and penalty-free, regardless of your age.
- To withdraw the earnings (the growth on your contributions) without taxes or penalties, you must meet the following conditions:
- The Roth IRA must have been open for at least 5 years (the "five-year rule"), counting from January 1 of the tax year you first contributed.
- You must be at least 59½ years old , or meet other qualified exceptions such as buying your first home (up to $10,000), being permanently disabled, or in case of the account owner's death.
If you withdraw earnings before these conditions are met, you may owe income taxes plus a 10% early withdrawal penalty, unless you qualify for an exception. In summary:
- Contributions: Withdraw anytime, no tax or penalty.
- Earnings: Withdraw tax- and penalty-free only after age 59½ and the account has been open for at least 5 years.
- Exceptions exist for early withdrawals on earnings in certain situations like first-time home purchase or disability.
This five-year rule also applies separately to conversions from traditional IRAs to Roth IRAs. These rules make Roth IRAs flexible for contributions but protective of earnings until retirement age or qualified conditions are met.
