IRA Rules

Posts Tagged ‘directed’

Question: Question about the 5 year rule on a Roth IRA account.?

I’m 22 years old and have got into investing. I have about 10,000 that i have been playing around with and would really like to start an Roth IRA. All though I plan on buying a house and going back to school and would like access to the money in the next 5-10 years.

I have been told that if you have money in a Roth IRA that you can take the money out without tax penalties if it has been in the account for 5 years or more.

Can someone explain this to me in better detail. I always thought that you have to wait till you get 59.5 years old to take it out. Please help me thanks

Answer: You do.

You pay no taxes when you make qualified withdrawals after age 59½ and your account has been open at least five years.

Investing & Retirement Funds : IRA Early Withdrawal Rules

Question: Roth IRA? I had to make an early withdrawal?

I have recently lost my job and unemployment is not covering all the bills! I have had to take some money from my IRA and I am wondering about the penalty and amount I am going to have to pay when I file my taxes.

Answer: I assume this Roth IRA was not converted from another retirement investment.

Your original contribution can be taken out tax-free. If you are under age 59.5, your earnings are going to be taxed and there will be a 10% penalty added as well. Use Form 8606 with your tax return to figure the tax and penalty.

Retirement Plans & Investments : How to Roll Over a Traditional IRA to a Roth IRA

Question: Can I withdrawal contributions to Roth IRA w/o penalty or any other tax etc.?

I would like to withdrawal a portion of the contributions to my Roth IRA.
No special reason other than the economy stinks and I can use the cash. In one sentence the IRS seems to say you can withdrawal from Roth no problem and in the next say it has to be for a small list of reasons or your taxed/penalized.

My belief is that I can pull out the contributions BUT not the earnings FROM the contributions.

Is this correct?????

Thanks for your time.

Answer: That is correct. You can pull out the contributions from your ROTH without taxes or penalties. If you pull out more than your contributions, then you will pay penalties on the earnings that you withdraw if you are not yet 59.5 years old.

Instead of taking money from a nice vehicle where the earnings are tax free, why don’t you just move them into something less volatile of you are nervous about the stock and bond markets. You can move it into the money market and make 3% which will be tax free as long as it is in the Roth. Then you can always move it back into investments once the markets look ripe again.

Personal Investment & Loan Tips : Roth IRA Borrowing Tips