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Level 2
posted Nov 9, 2022 12:58:20 PM

Is there a certain age you can take out of a traditional IRA without a penalty? What about Roth IRA?

Is there a certain age you can take money out of a traditional IRA without a penalty? What about Roth IRA?

0 2 154
2 Replies
Level 15
Nov 9, 2022 1:06:53 PM

Is there a certain age you can take money out of a traditional IRA without a penalty? 59.5

 

What about Roth IRA?  The  contributions can always be removed tax and penalty free ... the earnings are subjet to the 5 year rule & the 59.5 rule

 

https://www.irs.gov/publications/p590b
 

Level 15
Nov 9, 2022 4:21:58 PM

You can withdraw money from a traditional IRA in the year that you turn age 59 1/2, or after, and you will pay regular income tax but you will not pay the 10% penalty for early withdrawal.

 

Roth IRA‘s are a bit more complicated.  Withdrawals from IRAs are broken up by contributions, conversions, and earnings. You are always deemed to withdraw contributions first,  conversions second, and earnings last.

  • First, you can withdraw your contributions at any time without income tax or penalty.
  • Second, if part of the balance of your Roth IRA is from a conversion from a traditional IRA, you may withdraw that at any time without paying additional income tax, but you will pay 10% penalty if you are under age 59 1/2 and if the conversion was done less than five years ago. If the conversion was more than five years previous, you are exempt from the 10% penalty even if you are under age 59 1/2. 
  • Third, if you withdraw earnings from your Roth IRA, they will be subject to regular income tax plus a 10% penalty if you are under age 59 1/2. If you are over age 59 1/2, you will not be charged the 10% penalty, but you will still pay income tax on the earnings if you opened the Roth IRA less than five years previous.