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How to Withdraw Money Put Into a Roth IRA

by Contributing Writer
  • Overview

    The Roth IRA has tax advantages over the traditional IRA, because any annual contributions made have already been taxed. A Roth IRA is also free from any age-based distributions, so you can maintain the account for any future beneficiaries. Furthermore, you can also maintain a Roth IRA in addition to traditional retirement plans or employer-sponsored plans like a 401(k). However, withdrawing money from a Roth IRA can be potentially confusing because of the rules that determine whether your withdrawal will be subject to any additional fees.
  • Basics

 
  • Step 1

    Understanding the fundamental conditions of a Roth IRA withdrawal is important. Regardless of your age, you will always be able to withdraw your contributions from a Roth IRA without incurring penalties. The early withdrawal of earnings, however, is more complicated and can result in taxes and penalties if you are under the age of 59 1/2.
  • Step 2

    Determine if you fit the requirements for a qualified distribution, which is wholly tax and penalty-free. For a qualified distribution, your Roth IRA should have been established at least five years ago, and you need to be either at least 59 1/2 years old or disabled.
  • Step 3

    Consider any extenuating circumstances under which you might be making an early withdrawal. Special conditions will exempt you from penalties. For example, you can withdraw up to $10,000 from your Roth IRA if you are a buying a home for the first time. Some other qualifying withdrawals include paying for higher-education expenses, portions of your unreimbursed medical expenses or health insurance.
  • Step 4

    Contact your broker by phone or mail once you have decided to withdraw money. Your broker will either send you a check or directly deposit the money into your bank account.
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  • Consult with a financial adviser before making any sizable withdrawals from your Roth IRA.
  • Consult with a financial adviser before making any sizable withdrawals from your Roth IRA.

References & Resources