Roth IRA Withdrawal Rules

Making tax-free withdrawals from a Roth IRA depends on when — and what — you’re withdrawing, or else taxes and penalties could apply.
June Sham
Arielle O'Shea
By Arielle O'Shea and  June Sham 
Updated
Edited by Pamela de la Fuente

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Nerdy takeaways
  • Contributions can be withdrawn from a Roth IRA at any time without tax implications or withdrawal penalties.

  • Unless it's a qualified distribution, withdrawing earnings before retirement age could incur a 10% penalty and income taxes.

  • To withdraw earnings tax- and penalty-free, you must have held a Roth IRA for at least five years and be at least age 59½.

Each retirement account comes with its own tax advantages, and what sets the Roth IRA apart is tax-free withdrawals in retirement.

You pay taxes on the money you put into a Roth IRA upfront, the money grows in the account tax-free, and you can make qualified withdrawals in retirement tax-free. That’s the opposite of traditional IRAs and 401(k) plans, in which you contribute pretax money and pay taxes on the distributions.

But you can also withdraw from a Roth IRA early, and potentially without incurring taxes or penalties, if you follow the account rules.

When can you withdraw from a Roth IRA?

When it comes to Roth IRA withdrawal rules, there are two big distinctions to remember:

  • Contributions: Money you added into the Roth IRA can be withdrawn at any time without taxes or penalties. That’s because you already paid taxes on the money used to fund the account. 

  • Earnings: Investment gains that grow in the account can be subject to tax. Two criteria need to be met for penalty-free withdrawals of earnings: the account has to have been open for at least five years, and the account owner has to be age 59½ or older.

There are some exceptions, which would allow individuals to tap into their Roth IRA earnings early, and potentially without penalties and taxes.

» See our picks for best Roth IRA accounts

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Roth IRA distribution rules: Qualified vs. non-qualified

Roth IRA qualified distributions

To make a qualified distribution of investment earnings from a Roth IRA with no taxes or penalties, the Roth IRA must be at least five years old and one of the following applies:

  • You are age 59 ½ or older.

  • The withdrawal is due to a disability.

  • The withdrawal is made to a beneficiary or your estate after your death.

  • The withdrawal for is for buying, building or rebuilding a first home (up to a $10,000 lifetime limit). 

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» Learn more about the 5-year rule for Roth IRAs, and how it applies to accounts, conversions and beneficiaries

Roth IRA non-qualified distributions

Making a Roth IRA withdrawal outside of the above requirements could result in income taxes and a 10% penalty.

However, there are exceptions to the 10% penalty — but not income taxes — if you meet one of the following:

  • You have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income.

  • The distribution is for the cost of your medical insurance during unemployment.

  • You are receiving distributions in the form of a series of substantially equal periodic payments.

  • You are taking the distribution for qualified higher education expenses.

  • You are a survivor of domestic abuse.

  • The distribution is due to an IRS levy.

  • You made the withdrawal when you were a reservist, as defined by the IRS.

  • The distribution is for a qualified birth or an adoption of a child.

  • The distribution is a qualified disaster distribution or qualified disaster recovery distribution.

  • The distribution is a corrective distribution

    .

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How to plan a Roth IRA withdrawal

Making a financial plan for retirement often starts with estimating how much you'll need and how much you can contribute, but it also includes planning withdrawals.

With a Roth IRA, withdrawals are already more flexible because you can take out contributions at any time. But there's one more reason: Roth IRAs aren’t subject to required minimum distributions, unlike traditional IRAs or 401(k) plans.

That means account owners aren’t required to make withdrawals, even in retirement, and can allow the funds to continue to grow. And after account holders die, the money in the account can be passed along to the account beneficiary.

Taking money out of a Roth IRA early means potentially losing out on long-term growth, but if you're in a tight spot financially, it can be one option.

Some parameters to guide your decision about an early Roth IRA withdrawal could include how much you think you'll need, whether you're eligible for a qualified or non-qualified withdrawal, and estimating what the taxes and penalties (if any) might be if you plan to take out earnings.

Frequently asked questions

Yes, there may be a 10% penalty if you withdraw money early from your Roth IRA, but only if you're withdrawing from your earnings (the money that your money has earned in interest from being invested) and not your contributions (the money you actually put into the account).

You must be 59½ and have held your Roth IRA for at least five years before you withdraw investment earnings tax-free and penalty-free. You can withdraw your Roth IRA contributions at any age because you've already paid taxes on that money.

When it comes to Roth IRA withdrawals, contributions come out first. Amounts converted into the Roth IRA come out next, on a first-in, first-out basis, and earnings come out last.

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