Retirement tax questions

There are two requirements for a withdrawal to count as a qualified distribution:

  • Age: You may be hit with a 10% tax penalty and income taxes on any investment earnings you withdraw before age 59½. (There are some exceptions to this “early withdrawal” penalty.)
  • Time: Here’s where the “five-year rule” comes into play. Roth IRA owners must have their account for at least five years to avoid paying income tax on any withdrawn investment earnings.

This is the legal description. It is a positive one in my case.