How and When You Can Withdraw Money From a Roth IRA

You can withdraw your contributions anytime without penalty, but earnings have strict rules

A Roth IRA withdrawal works differently depending on whether you are taking out money you put in (contributions) or money the account earned (growth). You can pull out contributions you have already made at any time, for any reason, with no tax or penalty. Earnings are locked until you turn 59½, with narrow exceptions — and even then, your account must have been open for at least five tax years.

The five-year rule is the single most important thing to understand. It is not about your age; it is about how long the specific Roth IRA has existed. If you open a Roth IRA today and try to withdraw earnings in three years, the withdrawal is taxed and penalized even if you are 70. But if you opened one fifteen years ago, you can withdraw earnings penalty-free once you hit 59½, regardless of how long you have had the money in the account.

Key Takeaways

• Contributions (money you deposited) can be withdrawn anytime without tax or penalty, even before age 59½.
• Earnings can only be withdrawn penalty-free after age 59½ and only if the Roth IRA has been open for at least five tax years.
• If you withdraw earnings before 59½, you pay income tax plus a 10 percent penalty on the earnings portion, unless a narrow exception applies.
• Conversions from traditional IRAs to Roth IRAs have their own five-year rule and are treated separately from contributions you made directly.
• Roth IRAs have no required minimum distributions during your lifetime, so you can leave money untouched as long as you want.

The difference between contributions and earnings

The IRS tracks contributions and earnings separately inside your Roth IRA. Contributions are the dollars you put in yourself each year (up to the annual limit, which varies by year and income). Earnings are the interest, dividends, and capital gains your money made while sitting in the account.

When you withdraw, the IRS assumes you take contributions out first. So if you have put in $50,000 over ten years and the account has grown to $75,000, your first $50,000 in withdrawals are contributions and come out tax-free and penalty-free. Only after you have withdrawn all contributions do earnings start coming out.

This matters because it means you can access your own money without waiting for age 59½. Many people use this feature as an emergency fund, knowing they can reach their contributions if they need cash. Just keep records of how much you have contributed each year — your Roth IRA statement shows this, and the IRS Form 5498 you receive each January also lists it.

Withdrawing earnings before 59½: the exceptions

If you try to withdraw earnings before age 59½, you normally owe income tax on those earnings plus a 10 percent penalty. But the IRS allows withdrawals without the penalty in a few specific situations. These are narrow and require documentation.

First-time home purchase lets you withdraw up to $10,000 of earnings (lifetime limit) to buy, build, or rebuild a primary residence. You must not have owned a home in the two years before the withdrawal. This is one of the most commonly used exceptions.

Disability or medical expenses can also waive the penalty. If you are disabled (as defined by Social Security), you can withdraw earnings penalty-free. If you have unreimbursed medical expenses that exceed 7.5 percent of your adjusted gross income, you can withdraw earnings to cover them without the penalty — though you still owe income tax.

Death removes the penalty for your beneficiaries. If you die, anyone inheriting the Roth IRA can withdraw earnings without the 10 percent penalty, though they may owe income tax depending on their relationship to you and the withdrawal timing.

Other exceptions exist for substantially equal periodic payments (a complex calculation), health insurance premiums while unemployed, and a few others. But these three cover most real situations. If you think an exception might apply, check IRS Publication 590-B or speak with a tax professional before withdrawing, because taking money out incorrectly can trigger taxes and penalties you did not expect.

The five-year rule for Roth conversions

If you have converted money from a traditional IRA to a Roth IRA, that conversion has its own five-year holding period. The rule works the same way: you must wait five tax years before you can withdraw the converted amount penalty-free, even if you are over 59½.

The five-year clock starts on January 1 of the year you did the conversion. So a conversion in March 2024 means the five-year period ends on December 31, 2028. On January 1, 2029, you can withdraw that converted amount without penalty (though you still owe income tax on any earnings the conversion itself generated).

Conversions are tracked separately from regular contributions. If you converted $30,000 and also contributed $7,000 directly, you have $30,000 in conversion money and $7,000 in contribution money. The contribution money has no holding period; the conversion money has the five-year rule. Your brokerage statement should show this breakdown, or you can request a conversion history from your provider.

Withdrawals after 59½ and the five-year test

Once you turn 59½, you can withdraw earnings penalty-free — but only if the Roth IRA itself has been open for at least five tax years. This is where many people stumble. If you open a Roth IRA at age 58 and turn 59½ two years later, you cannot withdraw earnings yet because the account has not met the five-year test.

The five-year test is per account, not per person. If you have multiple Roth IRAs, each one has its own five-year clock starting from the year you first opened it. Some people consolidate multiple Roth IRAs into one to simplify tracking, which can help.

Once both conditions are met — you are 59½ and the account has been open five tax years — you can withdraw contributions and earnings together, and everything comes out tax-free. There is no limit on how much you can withdraw at that point. Unlike traditional IRAs, Roth IRAs have no required minimum distributions during your lifetime, so you can leave the money untouched as long as you want.

What happens if you withdraw too much too soon

If you withdraw earnings before 59½ and no exception applies, the IRS taxes the earnings at your ordinary income tax rate and adds a 10 percent penalty on top. So if you withdraw $5,000 in earnings and you are in the 24 percent tax bracket, you owe $1,200 in income tax plus $500 in penalty — a total of $1,700 in taxes and penalties on a $5,000 withdrawal.

The penalty is calculated on the earnings portion only, not on contributions. If you withdraw $10,000 and $3,000 of it is earnings, the penalty applies only to the $3,000. This is why tracking contributions matters: it directly affects your tax bill.

You report the withdrawal on IRS Form 8606, which reconciles your Roth IRA activity for the year. Your brokerage will send you a Form 1099-R showing the withdrawal amount. If you claim an exception to the penalty, you note that on Form 8606 as well. Filing incorrectly can trigger an IRS notice asking you to pay the penalty you thought you avoided, so accuracy matters.

Inherited Roth IRAs and withdrawal rules

If you inherit a Roth IRA from someone other than your spouse, the withdrawal rules change. You cannot treat it as your own account; instead, you must take distributions based on your life expectancy or empty the account within ten years (the rules depend on when the original owner died and whether they had started taking distributions).

Contributions and earnings in an inherited Roth IRA come out tax-free if the original owner had satisfied the five-year test. If the original owner had not held the account for five tax years, earnings are taxed when you withdraw them, though the 10 percent penalty does not apply to inherited accounts.

If you inherit from your spouse, you have more flexibility: you can treat the Roth IRA as your own, roll it into your own Roth IRA, or keep it as an inherited account. Each option has different withdrawal rules, so it is worth discussing with a tax professional.

Frequently Asked Questions

Can I withdraw my contributions without reporting it to the IRS?

Contributions come out tax-free, but you still need to report the withdrawal on Form 8606 when you file your taxes. The IRS tracks Roth IRA activity through the Form 1099-R your brokerage sends, so the withdrawal is reported whether you mention it or not. Reporting it correctly just makes sure you do not get penalized for something that should have been tax-free.

What if I need money and I am not sure if it is a contribution or earnings?

Your brokerage statement and annual Form 5498 show your contribution basis. Add up all contributions you have made since opening the account; anything above that is earnings. If you have made conversions, those are listed separately. When in doubt, contact your brokerage and ask for a breakdown of contributions versus earnings.

Does the five-year rule reset if I roll my Roth IRA into a new one?

No. The five-year clock is based on when you first opened any Roth IRA, not when you opened the current one. If you opened a Roth in 2015 and rolled it into a new Roth in 2020, the five-year test was already satisfied in 2020. Rolling does not restart the clock.

Can I withdraw money to pay off credit card debt?

You can withdraw contributions anytime for any reason. If you need to tap earnings, you would need to meet one of the narrow exceptions (disability, medical expenses, first-time home purchase, etc.). Credit card debt does not may have access to as an exception, so withdrawing earnings for that purpose would trigger taxes and the 10 percent penalty.

What if I withdraw earnings by mistake and realize it later?

You can redeposit the money back into the Roth IRA within 60 days, and the IRS treats it as if the withdrawal never happened. This is called a rollover. You must redeposit the full amount, including any taxes withheld. After 60 days, the withdrawal is final and taxes apply. If you made this mistake, contact your brokerage immediately to discuss your options.