How to Withdraw Money From Your Roth IRA

You can pull money out of your Roth IRA, but the rules depend on whether you're taking contributions, earnings, or both

A Roth IRA withdrawal follows a specific order: contributions come out first and tax-free at any time, then earnings come out only if you meet age and holding-period rules. The IRS treats these differently because you already paid taxes on the money you contributed. If you withdraw earnings before age 59½ and before holding the account for five years, you'll owe income tax on those earnings plus a 10% penalty — with some exceptions.

The key is knowing which bucket you're pulling from. The IRS uses what's called the "pro-rata rule" to determine this when your withdrawal is smaller than your total contributions. Understanding this rule and the exceptions to the early withdrawal penalty can save you thousands in taxes.

Key Takeaways

• You can withdraw your contributions to a Roth IRA at any time, tax-free and penalty-free, regardless of your age.
• Earnings can only be withdrawn tax-free if you are at least 59½ years old and have held the account for at least five tax years.
• Withdrawing earnings before age 59½ triggers a 10% penalty plus income tax, unless you meet a narrow exception like disability or a first-time home purchase.
• The IRS pro-rata rule applies when you have both traditional and Roth IRAs, potentially making a withdrawal more costly than you expect.
• Roth conversions have their own five-year rule separate from the account's five-year holding period.

Contributions versus earnings: what comes out first

When you withdraw from a Roth IRA, the IRS assumes you take your contributions out first. This matters because contributions are always yours to take without tax or penalty. If you contributed $5,000 per year for ten years, you have $50,000 in contributions sitting there, and you can pull any or all of it out whenever you want.

Earnings are the investment gains on top of your contributions — the interest, dividends, and capital appreciation. Once you've withdrawn all your contributions, any further withdrawal is treated as earnings. Those earnings face the 10% early withdrawal penalty and income tax if you're under 59½ and haven't held the account for five tax years.

Your Roth IRA statement should show your contribution basis clearly. If it doesn't, you can reconstruct it by adding up all your Form 5498 documents (the IRS sends these to you each year) or by contacting your custodian directly.

The five-year holding period for earnings

Even if you're 59½ or older, you cannot withdraw earnings tax-free unless the account has been open for at least five tax years. This five-year clock starts on January 1 of the year you opened your first Roth IRA, not the date you made your first deposit. If you opened a Roth in April 2024, the five-year period runs through December 31, 2028.

This rule applies to all your Roth IRAs as a group. If you have multiple Roth accounts, they share the same five-year clock. Opening a second Roth IRA does not restart the timer.

If you withdraw earnings before five years have passed, you owe income tax on those earnings plus the 10% penalty, even if you're over 59½. The only way around this is to meet one of the narrow exceptions to the early withdrawal penalty.

Exceptions to the 10% early withdrawal penalty

The IRS allows penalty-free withdrawals of earnings before age 59½ in specific situations. You still owe income tax on the earnings, but the 10% penalty is waived. These exceptions include disability, medical expenses that exceed 7.5% of your adjusted gross income, health insurance premiums while unemployed, and a first-time home purchase (up to $10,000 lifetime).

Another exception is substantially equal periodic payments, or SEPP. This is a complex calculation that lets you take a series of equal withdrawals based on your life expectancy. Once you start SEPP, you must continue for five years or until you reach 59½, whichever is longer. Breaking this schedule triggers the 10% penalty retroactively on all prior withdrawals.

Contributions are never subject to the penalty, so these exceptions only matter if you're pulling earnings. If you're under 59½ and want to withdraw earnings, check the IRS Publication 590-B to confirm your situation qualifies.

How the pro-rata rule affects mixed IRA accounts

If you have both a traditional IRA and a Roth IRA, the pro-rata rule applies to any withdrawal you make. This rule treats all your IRAs as a single pool for tax purposes, even though they're held at different institutions. When you withdraw from a Roth, the IRS calculates what percentage of your total IRA balance is pre-tax money (from traditional, SEP, or SIMPLE IRAs) and taxes that same percentage of your Roth withdrawal.

This can be costly. Suppose you have a $100,000 traditional IRA and a $50,000 Roth IRA. If you withdraw $10,000 from the Roth, the IRS treats $6,667 of it as coming from pre-tax money (two-thirds of your total balance), even though you're pulling from the Roth. You'd owe income tax on that $6,667.

The pro-rata rule applies to the calendar year in which you make the withdrawal. Some people use a strategy called a "backdoor Roth" to work around this, but it requires careful timing and coordination with any traditional IRA balances you hold.

Roth conversions and the five-year rule

If you converted money from a traditional IRA to a Roth IRA, that converted amount has its own five-year holding period separate from the account's five-year rule. You can withdraw your original contributions anytime, but converted amounts face a 10% penalty if withdrawn within five years of the conversion, even if you're over 59½.

Each conversion has its own five-year clock. If you converted $10,000 in 2023 and another $10,000 in 2024, the 2023 conversion is penalty-free after December 31, 2027, but the 2024 conversion isn't penalty-free until December 31, 2028. Your custodian should track these separately on your statements.

This rule applies only to the converted amount, not to earnings on that conversion. Once five years have passed, you can withdraw the converted amount penalty-free, though you may still owe income tax if you haven't met the age and holding-period requirements for earnings.

Ordering your withdrawal to minimize taxes

When you request a withdrawal, you can specify which funds to pull from — contributions first, then conversions, then earnings. Your custodian must honor this ordering request in writing. Taking contributions first is almost always the right move because they're never taxed or penalized.

If you need more than your contributions, consider whether you can wait until you're 59½ and the account has been open five years. If you can't wait, check whether you meet an exception to the penalty. If you don't, the tax and penalty on earnings can be substantial.

Some custodians make this easier than others. Vanguard, Fidelity, and Schwab all allow you to specify the order in writing. Smaller custodians may require a phone call or letter. Get the request in writing so there's no dispute later about which funds you withdrew.

Frequently Asked Questions

Can I withdraw my contributions without telling the IRS?

You don't need to report contributions you withdraw on your tax return because you already paid taxes on that money. However, your custodian will send you a Form 1099-R if the withdrawal exceeds $10, and the IRS receives a copy. The form will show the gross withdrawal amount, so keep records showing how much was contributions versus earnings in case the IRS questions it.

What happens if I withdraw earnings and don't meet the five-year rule?

You'll owe income tax on the earnings at your ordinary tax rate, plus a 10% penalty on top of that. If you're in the 24% tax bracket and withdraw $5,000 in earnings, you'd owe roughly $1,700 in tax and penalty combined. The only way to avoid the penalty is to meet one of the IRS exceptions.

Does taking a loan from my Roth IRA count as a withdrawal?

Roth IRAs do not allow loans. You can only withdraw funds. If your custodian offers a loan feature, it's not a true Roth IRA loan — it's a withdrawal that you're repaying. This withdrawal still counts against your contribution basis and may trigger tax and penalty if you don't repay it on time.

If I'm over 59½, can I withdraw earnings without the five-year rule?

No. You must meet both conditions: age 59½ and five tax years of holding the account. If you're 60 but opened the account only three years ago, earnings are still subject to income tax. The five-year rule has no age exception.

What if my custodian won't let me specify the withdrawal order?

Request the ordering in writing and keep a copy. If the custodian refuses or ignores your request, consider moving your account to a custodian that honors withdrawal ordering. Fidelity, Vanguard, and Schwab all support this. You can roll your Roth to a new custodian without tax consequences.