Roth IRA Penalty?

Forum|Forum|3 years ago
March 22, 2023
3 replies
14 views

If I withdraw contributions from my Roth IRA will I get penalized? I have a small amount in there and have only lost money. I haven't made anything so want to put it in a high yield checking/savings instead. I was under the impression I won't get penalized on withdrawing contributions from my Roth IRA.

DavidD66

Level 15

If you withdraw your contributions to a Roth IRA you will not have to pay a penalty. You can withdraw contributions you made to your Roth IRA anytime, tax- and penalty-free. However, you may have to pay taxes and penalties on earnings in your Roth IRA. In order to avoid a potential 10% early withdrawal penalty:

Withdrawals must be taken after age 59½.
Withdrawals must be taken after a five-year holding period.

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dmertz

Level 15

Instead of taking the money out of the Roth IRA, why would you not just do trustee-to-trustee transfer of the funds to a fixed-income investment in another Roth IRA?