How to Withdraw Money From Your Roth IRA

You can withdraw your contributions anytime without penalty, but earnings have rules

A Roth IRA withdrawal means taking money out of your account. The rules depend on whether you are withdrawing money you put in (your contributions) or money the account earned (investment gains). You can pull out contributions you have already made at any time without paying taxes or penalties. Earnings are different — they come with age and holding-period requirements that vary based on your situation.

The IRS treats Roth IRAs differently from other retirement accounts because you already paid taxes on the money going in. That is why the rules are more flexible for your own contributions. But the account still has rules about when you can take earnings out penalty-free.

Key Takeaways

• Contributions (money you deposited) can be withdrawn at any time without taxes or penalties, regardless of your age.
• Earnings can be withdrawn penalty-free only if you are 59½ or older and have held the account for at least five tax years.
• Withdrawing earnings before 59½ usually triggers a 10 percent penalty plus income tax, unless you may have access to for a narrow exception.
• The IRS uses a "pro-rata rule" if you have both Roth and traditional IRAs, which can make early earnings withdrawals more expensive than expected.
• You report Roth withdrawals on Form 8606 when you file taxes, which tells the IRS how much was contributions versus earnings.

How the IRS tells contributions apart from earnings

The IRS assumes you withdraw contributions first, then earnings. This matters because it means you can take out a chunk of money and only pay tax and penalties on the portion that counts as earnings. Your brokerage or bank (wherever your Roth IRA sits) tracks your contribution history, so you do not have to calculate this yourself — but you need to know the rule exists.

If you put in $5,000 a year for five years and the account grew to $30,000, you have $25,000 in contributions and $5,000 in earnings. A $10,000 withdrawal counts as $10,000 in contributions first, so no tax or penalty. A $30,000 withdrawal counts as $25,000 contributions plus $5,000 earnings, so the earnings portion gets taxed and possibly penalized.

Your brokerage will ask you how much you want to withdraw and will calculate the split for you. They will also report it to the IRS on Form 5498-R, which is the document that tracks Roth distributions.

Withdrawing contributions with no age limit or waiting period

You can withdraw your contributions in full at any age without penalty or income tax. There is no five-year holding period, no age 59½ requirement, and no paperwork beyond telling your brokerage to send you the money. This is one of the biggest advantages of a Roth IRA over a traditional IRA or 401(k).

The catch is that you can only withdraw what you actually contributed. If you contributed $15,000 over three years and the account is now worth $20,000, you can withdraw $15,000 penalty-free. You cannot withdraw the $5,000 in gains without meeting the earnings rules. Your brokerage will enforce this split automatically.

This flexibility makes Roth IRAs useful as an emergency fund for some people, though most financial advisors suggest keeping retirement money in the account to grow. Once you withdraw contributions, you cannot put that money back in unless you make a new contribution in a future year (and you are still subject to annual contribution limits).

Withdrawing earnings before age 59½: the five-year rule and exceptions

Earnings can be withdrawn without penalty only if you meet two conditions: you are 59½ or older, and you have held the Roth IRA for at least five tax years. The five-year clock starts on January 1 of the year you made your first contribution to any Roth IRA, not the date you opened the account. If you opened a Roth in June 2020, the five-year period ends on January 1, 2025.

If you withdraw earnings before 59½, you pay income tax on them plus a 10 percent penalty — unless you fall into a narrow exception. The IRS allows penalty-free (but not tax-free) early withdrawals of earnings for: disability, medical expenses over 7.5 percent of your adjusted gross income, health insurance premiums while unemployed, first-time home purchase (up to $10,000 lifetime), and a few others. You still owe income tax on the earnings in all these cases; the penalty is what gets waived.

If you do not meet the five-year rule or an exception, withdrawing $5,000 in earnings before 59½ means paying income tax on that $5,000 plus $500 in penalty (10 percent). The tax rate depends on your overall income that year.

The pro-rata rule: why having a traditional IRA complicates things

If you own both a Roth IRA and a traditional IRA (or SEP-IRA or straightforward IRA), the IRS applies the pro-rata rule to any early withdrawal of Roth earnings. This rule treats all your IRAs as one account for tax purposes, which can make a Roth withdrawal much more expensive than you expect.

Here is the math: say you have a Roth IRA with $50,000 (all contributions) and a traditional IRA with $100,000 (all pre-tax money). You want to withdraw $10,000 in Roth earnings. The pro-rata rule says the IRS will treat your withdrawal as coming proportionally from both accounts. Since your traditional IRA is two-thirds of your total IRA balance, two-thirds of your withdrawal ($6,667) is treated as coming from the traditional IRA and is taxable. Only one-third ($3,333) comes from the Roth and avoids tax.

This rule catches many people off guard. If you have a traditional IRA and want to do a Roth conversion or withdraw Roth earnings early, talk to a tax professional first. The pro-rata rule does not explore if you roll the traditional IRA into a 401(k) at work (if your plan allows it), which is one reason some people do that before a Roth conversion.

How to request a withdrawal from your brokerage

Contact your brokerage or bank directly — the company that holds your Roth IRA. You can usually request a withdrawal online through your account portal, by phone, or by mail. The process takes a few days to a week. You will need to specify the dollar amount and whether you want a check mailed to you or the money transferred to a bank account.

Your brokerage will ask whether you want to sell investments first (if your Roth holds stocks or mutual funds) or if they should liquidate positions for you. If you do not specify, they will usually sell enough to cover the withdrawal amount. You may owe capital gains tax on any profit from selling investments, though this is separate from the Roth withdrawal rules.

The brokerage will send you a confirmation and will report the withdrawal to the IRS on Form 5498-R. Keep this form — you will need it when you file taxes to report the withdrawal on Form 8606.

Reporting your withdrawal on your tax return

You report Roth IRA withdrawals on Form 8606 when you file your federal tax return. This form tells the IRS how much of your withdrawal was contributions (not taxable) and how much was earnings (possibly taxable). Your brokerage will send you the information you need on Form 5498-R, which shows the total amount withdrawn.

If you withdrew only contributions, Form 8606 will show zero taxable amount. If you withdrew earnings before 59½ and do not may have access to for an exception, you will report the earnings as income on your return and may owe the 10 percent penalty as well (reported on Form 5329). A tax software package or tax preparer can walk you through this, but the basic rule is: contributions go on one line, earnings on another.

Filing Form 8606 is required even if you owe no tax, because it documents your contribution history for the IRS. If you do not file it and the IRS audits you, they may assume your entire withdrawal was earnings and tax you accordingly.

Frequently Asked Questions

Can I withdraw my contributions without telling the IRS?

You do not need to ask permission, but you do need to report the withdrawal on Form 8606 when you file taxes. Your brokerage will report it to the IRS automatically, so the IRS will know whether you filed the form. Withdrawing contributions is not taxable, but the IRS still wants documentation of how much you took out and how much was contributions versus earnings.

What happens if I withdraw earnings and do not meet the five-year rule?

You owe income tax on the earnings at your regular tax rate, plus a 10 percent early withdrawal penalty. If you withdrew $5,000 in earnings and your tax bracket is 22 percent, you owe $1,100 in tax plus $500 in penalty, for a total of $1,600. Some exceptions (disability, medical expenses, first-time home purchase) waive the penalty but not the tax.

Can I put the money back after I withdraw it?

You can contribute new money to your Roth IRA in future years up to the annual limit, but you cannot "redo" a withdrawal. Once money leaves the account, it is gone. You are limited to $7,000 per year (or $8,000 if you are 50 or older) in new contributions, so rebuilding a large withdrawal takes time.

Does withdrawing from my Roth IRA affect my Social Security or Medicare?

Roth withdrawals do not count as income for Social Security benefit calculations or Medicare premium adjustments, which is another advantage over traditional IRA withdrawals. However, if the withdrawal causes you to sell investments at a gain, that capital gain does count as income for these purposes.

What if my brokerage closed or went out of business?

Your Roth IRA is protected by SIPC (Securities Investor Protection Corporation) up to $500,000 per account type. If your brokerage fails, SIPC will transfer your account to another firm or return your money. You should still keep records of your contributions and account statements in case you need to prove your contribution history to the IRS.