Retirement tax questions

@dbryda23 - just be careful - yes, the contributions can be distributed and there is no tax and no penalty for doing so.  You already paid any tax prior to contributed the money in the first place.

 

However, the earnings are a different story.  Thy are taxable.  They are also subject to a 10% penalty since you are under 59.5 years old (unless one of the exceptions applies).

 

Say you cotnributed $100,000 over the years to your Roth and it is now worth $125,000.  You want to withdraw $100,000.  The IRS assumes all the contributions are withdrawn first, any Conversions from a Trad IRA are 2nd and all the earnings are last.  In this example, there would be no tax and no penalty because you are only withdrawing what you originally contributed. But anything else you attempt to withdraw (the remaining $25,000 and any further earnings on the $25,000) is subject to ordinary tax as well as the 10% penalty.  The 10% penalty can be waived if you meet one of the few exceptions (and one of those exceptions is being over 59.5 years old); the ordinary tax can not be waived.