Roth IRA Withdrawal Rules: What You Can Take Out and When

You can withdraw your Roth IRA money, in an order that is fixed: first the contributions, then the converted amount(s), and last the earnings on those amounts. The contribution portions of your withdrawals will be tax-free and without penalty at any time after they were made. Your earnings may also be withdrawn tax free only if you have had your account open for 5 years and you are 59 1/2 or meet one of several other exceptions. Each recent conversion has its own 5 year rule. That ordering is why the common misconception about Roth IRAs is wrong.

You can withdraw your money from a Roth IRA before you turn 59 1/2, but you cannot withdraw earnings without tax or penalty until the five-year rule and that age line are both satisfied, unless an exception applies. Withdrawals of contributions may occur at any time tax-free and penalty-free.

What are the Roth IRA withdrawal rules?

You withdraw funds from a Roth IRA based on an established sequence within the account (the order required by the Internal Revenue Service), and there are no exceptions to this order. Under the ordering rules in IRS Publication 590-B, the layers of your Roth IRA, in order, are: your regular contributions, which have been taxed, then your converted amounts, with the earliest conversion being withdrawn first, and only after both of those layers are depleted will withdrawals come from earnings.^[1] If you had multiple accounts (i.e., multiple Roth IRAs), they would be treated as one single account for purposes of this rule, and thus cannot be used to change the outcome. Once again, since contributions have already been taxed, those items in layer one will always be tax-free and penalty-free regardless of your age. It is not until you have exhausted layers one and two (your contributions and conversions respectively) that distributions begin to affect earnings (layer three). Income tax and the 10% additional tax can apply once a distribution reaches earnings. If you want information about what may go into these layers before this governing sequence determines what can come out, our guide on Roth IRA contribution limits provides such details.

Can you withdraw from a Roth IRA before 59 1/2?

Yes. You may withdraw your own contributions to a Roth IRA at anytime you wish, regardless of age, without penalty or taxes since the money has already been taxed prior to entering into your account. A non-qualified withdrawal is treated as if it first touched your contributed portion of the account before reaching any other funds that are considered taxable income.^[2] Therefore, the 59 1/2 line only applies to the earnings component.

You may pull out over your contribution amount in total, but if you do that and go into the next dollars then they will come from conversions or earnings. However, this is when the early withdrawal penalty and the 5-year rules will begin to affect you.

What is the Roth IRA 5 year rule?

There are actually two 5-year rules, and confusing them is the most expensive mistake people make with a Roth.

The first is the earnings clock, which will be set as of January 1 of the first year you contribute to any Roth IRA, and determine if all of your earnings are tax-free. The clock is set only once, and thus never resets regardless of how many years may pass from when it was established. Therefore, even if you have had an account open since way back in time, it still qualifies. If you only ever convert money into the account, then the clock will start with the year of your first conversion.

The second is a per-conversion clock. When you convert, each conversion starts its own 5-year term and the previously untaxed amount would be subject to the 10% additional tax (a charge the IRS refers to as a recapture and reports on Form 5329) when withdrawn before that term ends and prior to age 59 1/2.^[1] Since each has its own time frame, a conversion clock does not have to start at the same time as your contribution clock. Therefore, if you make a conversion in 2025, that will mark the beginning of that conversion's clock on January 1, 2025, regardless of how long ago you began making contributions.

What is the Roth IRA early withdrawal penalty?

The Roth IRA early withdrawal penalty is a 10% additional tax on the taxable amount of a distribution made from a Roth IRA prior to reaching age 59 1/2, reported on Form 5329. This tax never touches your contributions. It affects only your earnings which are withdrawn in a non-qualified distribution or the previously untaxed portion of your conversion within its 5-year window after it has been converted into this type of account.^[1] A small withdrawal that remains below your total contribution level owes nothing.

There are some exceptions to the 10% additional tax that could apply regardless of whether the earnings remain subject to taxation (i.e., earnings for a first home to the extent they do not exceed a $10,000 lifetime limit, qualified higher-education costs, if you become totally and permanently disabled or in the event of your death). The exception would remove the 10% additional tax but does not affect whether any part of those withdrawals will be subject to ordinary income taxes. In addition, with a backdoor Roth, the rule applies only to such portion(s) as were taxed upon conversion.

What makes a Roth distribution qualified?

A qualified distribution makes your earnings completely tax-free and penalty-free. The test has two parts, and you need both. Under 26 U.S.C. 408A, the account must satisfy the 5-year rule, and the distribution must also be made on or after age 59 1/2, because of disability, to a beneficiary after your death, or for a first home up to a $10,000 lifetime limit.^[3] Miss either part and the withdrawal is non-qualified, but the ordering rules still return your contributions tax-free first, so only the earnings you reach face ordinary income tax plus the 10% additional tax unless an exception applies. That first-home cap is a lifetime figure, not per purchase.

Do Roth IRAs have required minimum distributions?

No. You never have to take an RMD from a Roth IRA as its original owner, regardless of how old you are. The IRS clearly states that you may keep money in a Roth IRA for as long as you live. This is in stark contrast to a traditional IRA which requires withdrawal of funds annually once you reach your required beginning age.^[2] That said, this benefit does come to an end when the account owner passes away. Most non-spouse beneficiaries will be forced to withdraw all of the inherited Roth assets by the end of the 10th year after the owner dies, something we discuss further in our article about required minimum distribution rules. This is also why a Roth pairs well with employer plans such as a Roth SIMPLE IRA.

The Bottom Line

You can withdraw from your Roth IRA, in an order of contributions, conversions and earnings. Anytime you withdraw contributions they will be tax free and penalty-free. For this reason a Roth IRA is more accessible than many believe it to be. The earnings that have occurred on the investment are only tax free if there has been a qualified distribution (the 5 year rule plus being at least 59 1/2 years old or another exception). Keep track of how much you have contributed to your account as well as when you made conversions before withdrawing money.

This guide is educational and summarizes IRS rules for Roth IRA withdrawals. It is not investment, legal, or tax advice. Your account documents and current IRS limits control. Talk to your tax advisor about your circumstances.