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Level 6

Question

Pulling from Roth IRA before age 60

Forum|Forum|26 days ago
July 24, 2026
25 replies
204 views

My understanding is that you can pull from what you already made to “contributions” from your Roth IRA even before age 60 without penalities. You have already paid taxes on your contributions so you won’t get penalized even if you pull them out before age 60.

How does Turbotax address it or even know it?

Let’s say Roth IRA is $100k for ease of math. Let’s say $30k is contributions (already paid taxes on it) and $70k are earnings. According to brokerage, they told me the $30k are contributions. They have a Form 5498 IRA Contribution Information report that shows it. The problem is that the Form 5498 shows a section 2 “rollover contributions” number higher than the $30k. The figure includes the earnings + contributions in section 2 “rollover contributions” on the Form 5498. So how do you validate the “contributions" only?

If I pull out $30k from Roth IRA before age 60, that $30k is tax free since I already paid taxes on it. I don’t get access 10% early penalty. When you do your taxes, how does Turbo Tax know where and how to categorize the $30k withdrawl so you don’t get taxed on the $30k or get assessed the 10% early penalty fee?

Or let’s say I pull out $40k. When you do your taxes, how do they know $30k is tax free with no early 10% penalty, and $10k is taxable and get assessed the 10% early penalty?

NCperson

Level 15

this should all be reconciled on form 8606. and it’s otherwise up to you to have good records. Also, the Box 7 code on form 1099-R often telegraphs to Turbo Tax how to treat the distribution and that code will indicate it was a Roth distribution. When you enter form 1099-R into Turbo Tax, it will ask you a bunch of questions to determine what is taxable and what isn’t.

prior to age 60:

the contributions come out first and are tax free. That is regardless of the year of contribution.
any money rolled over from a traditional IRA comes out 2nd. that is regardless of the year of the rollover. the rollover dollars that are distributed are tax free (you paid any tax when you rolled it over); but you are subject to the 10% penalty on any rollover that occured in the past 5 calendar years (so for 2026, that means any rollovers that occured in 2022-2026). the rules are a little more technical than this, but let’s leave it simple.
the earning come out last. they are subject to both income tax and the 10% penalty.

jyeh74Author

Level 6

I can’t remember getting a form 8606. It was previous employer’s Roth 401k that moved into Fidelity Roth IRA in 2024. Does the contribution money have to sit in the the Fidelity Roth IRA for a certain amount of time before it can be pulled out?

NCperson

Level 15

you do not ‘get’ a form 8606. it’s a form you create when you complete your taxes each year and have IRA contributions.

the contributions sitting in a Roth can be distributed at any time without income tax and without 10% penalty implications. You could contribute today and distribute tomorrow with no tax implications on the contributions. (note that money converted from a Trad IRA are not ‘contribution’ dollars in IRS speak - there are different distributions rules for that bucket of money).

jyeh74Author

Level 6

I read somewhere that contributions can be withdrawn right away after it is rolled over to a roth IRA. But earnings have to wait 5 years before it can pulled out.

Mike9241

Level 15

Example: You never opened a Roth IRA account. You transfer all your Roth 401(k) funds to a Roth IRA that you just opened. This will be a qualified distribution from the 401(k) plan if you are 59-½ or over, and all the dollars rolled over to the Roth IRA will be available on a tax-free basis. However, since it is a new Roth IRA, just having been opened and you never had any other Roth IRA accounts before, there will be a 5-year holding/seasoning period requirement to be met before any subsequent earnings distributed will be tax-free. While the rollover amount will be available tax-free, not the future earnings of the Roth IRA, not until at least 5 years have passed.

if you are not 59 ½

you roll over a Roth 401(k) to a Roth IRA and then withdraw the contributions before age 59½, the tax treatment depends on whether the rollover itself is qualified or non-qualified.

1. Qualified vs. Non-Qualified Rollover

Qualified rollover: You must be 59½ or older (or disabled, or using funds for first-time homebuyer expenses) and have held the Roth 401(k) for at least 5 years (from Jan. 1 of the year you first contributed to that plan)
Non-qualified rollover: You are under 59½ or have not met the 5-year holding period

2. What Happens After a Non-Qualified Rollover

If your rollover is non-qualified:

The Roth 401(k) contributions you roll over remain in the Roth IRA as basis and can be withdrawn tax-free and penalty-free at any time
The Roth 401(k) earnings and any post-rollover Roth IRA earnings are treated as earnings and are subject to the Roth IRA’s 5-year holding period.
- If you withdraw them before the 5-year mark, they are taxable and may also be subject to a 10% early withdrawal penalty if you are under 59½
The IRS uses a ratio method to separate contributions from earnings:
- Ratio = (Total contributions) ÷ (Total account balance)
- Earnings portion = Distribution amount × (1 – ratio

Example if you have had a Roth IRA account opened 5 or more years ago you could roll the Roth 401(k) into that account or even a new Roth IRA account. you have met the 5-yaer rule so, however, you must be 59½ or older for any earnings withdrawal to be tax free

Mike9241

jyeh74Author

Level 6

@Mike9241 so the 5 year rule applies to when the Roth IRA was opened, not when the employer Roth 401k was rolled into the Roth IRA. That clarifies it a lot.

The Roth IRA was opened in 2018. In 2018, previous employers Roth 401k was rolled into this Roth IRA. Then in 2024, another employer Roth 401k was rolled into this same Roth IRA. Do the earnings from the 2024 employer Roth 401k meet the 5 year rule? Originally I thought no, because it was rolled into Roth IRA in 2024 so only 2 years. But since the Roth IRA was opened in 2018 it meets the 5 year rule.

NCperson

Level 15

It’s not the “earnings” that meet the 5 year rule, it’s that the Roth IRA has been open for at least 5 years, and you do satisfy that requirement since ANY Roth IRA you own has been open for at least 5 calendar tears.

However, until you are 59.5 years old, distribution of the earnings is subject to income tax and the 10% penalty.

look at the chart in Publication 590-B, page 34. The first box asks whether the ROTH has been open for at least 5 calendar years. The chart NEVER asks about the age of the earnings.

NCperson

Level 15

https://www.irs.gov/pub/irs-pdf/p590b.pdf

jyeh74Author

Level 6

The 5 year backdates to Jan 1, 2018 not from when it was actually rolled over. I thought if I rolled over in June 2018 it would go until June 2023 but I read that the IRS backdates it to Jan 1, 2018 to Jan 1, 2023. Someone correct me if I’m wrong.

Also, just opening the Roth IRA and waiting 5 years doesn’t satisfy the 5 year rule. You have to fund it. Whether it’s a $1 direct contribution or a $1 roll over. Which I satisfied with the employer Roth 401k rollover into the Roth IRA in 2018. Any future roll overs or direct contributions to this Roth IRA does NOT restart the 5 year rule. The 5 year rule was already satisfied in Jan 1, 2023.

jyeh74Author

Level 6

I also don’t see why the 5 year rule really matters. Just don’t open your first Roth IRA at age 60. If you plan to retire at age 59.5, as long as you open the Roth IRA latest latest latest by age 54.5, then by age 59.5 all withdrawals including earnings will be tax free.

NCperson

Level 15

In a convulted way, you explained why, in fact, the 5 year rule matters. The earnings can’t be tax free, unless the Roth has been open for 5 calendar years (and you are at least 59.5) .

for example, if you open the Roth at Age 65, the earnings are subject to in come tax (but not the 10% penalty) until you reach Age 70 (5 calendar years).

The real benefit of a Roth is keeping the money inside the Roth as long as you can and let it grow tax free. Most would state the goal is NOT to withdraw all the money as soon as it is tax free to do so. Why not let it continue to grow tax free if not needed to live on?

NCperson

Level 15

that is correct. It is based on CALENDAR years. (read back through my posts and that is why I state ‘calendar years”.

You must OPEN and FUND the Roth to get credit for that calendar year. Since you opened and funded your Roth in June 2018, you satisfy the “5 year rule” on January 1, 2023. The five calendar years that you had it opened were 2018, 2019, 2020, 2021 and 20222, so when the calendar turned to January 1, 2023, the five calendar rule was satisfied. and yes, at long as $1 we went into the Roth, it was “funded”,

When do you turn 59.5 years old?