Roth IRA Question

[recxjake]

1

[pr_capone]

Seems so

http://www.fool.com/money/allaboutiras/allaboutiras06.htm


Remember that, under the Roth IRA rules and unlike the rules for a regular IRA, you can first remove your contributions without tax or penalty. So, in Example #1 above, if Bill decided to take a withdrawal of only $2,000, it would be treated as a distribution of his original contributions, and would not be subject to taxes or penalties. That only makes sense since Bill didn't get to deduct that contribution from his taxable income when it was originally made (so, he's already paid income tax on the money).

[recxjake]

Seems so

http://www.fool.com/money/allaboutiras/allaboutiras06.htm


Thanks

[The Rick]

Need to read further...

Any qualified distribution from a Roth IRA is NOT included in gross income for individual tax purposes. Simple as that. In effect, a qualified distribution from a Roth IRA is tax-free... no taxes due on the principal... no taxes due on the earnings... no taxes due, period.

To be qualified, the distribution MUST be:

Made on or after the date you become age 59 1/2; OR
Made to your beneficiary, or to your estate, after you die; OR
Made to you after you become disabled within the definition of the IRS code; OR
Used to pay for qualified first-time homebuyer expenses.
But -- and this is a very big but -- even if one of the qualifications above is met, the distribution is STILL not qualified if it is made within a five-tax-year period. We'll see how to compute the five-tax-year holding period a bit later. Just know that five tax-years are NOT necessarily the same as five calendar years.

So, in effect, there are two sets of rules that must be met before a Roth IRA distribution becomes qualified, and therefore tax-free: The distribution rules and the five-tax-year rules. Unless both sets of rules are met, the distribution will NOT be qualified, and the earnings will be subject to tax, and possibly penalties. We'll discuss penalties in detail in the next article.

[pr_capone]

Need to read further...

Erm.... you might want to RTFA.

You can withdrawal what you deposit but you cannot touch the interest earned.

[petegz28]

My wife is an IRA Administrator. She says you can pull out your initial capital AFTER 5 years from your first contribution or you will be penalized if it is under 5 years.

[BIG K]

So I've been putting 100 bucks a month into my Roth IRA for a few years now... I'm in a money crunch due to interning... I only have a few more weeks of the internship and I'm back to my part time job during school.

My question is... can I take $$ out of Roth for a month or so to hold me over w/out paying a penalty on it? I've always thought that you can always take out what you put in, just not what you earn on what you put in... correct?


As much as I respect our fellow planateers here, I would suggest you consult advice from a tax person or at least, a financial advisor....

[ChiefaRoo]

well I called fidlelity... and at 10:30 pm on a Friday night, a fresh out of college ira expert told me that I'm find to take out what I put in, just not what I earned on

I highly recommend that you do not ever take money out of your retirement unless it is an absolute life and death emergency. In fact, from age 22 on you should be maxing out the amount you can put in your Roth, 401K et al. This is how you build wealth for when you get old as the last 10 years of your IRA will see EXPODENTIAL growth. Don't waste that now just because your in a tight spot.

[petegz28]

You can withdraw an amount equal to your contributions at any time without any tax liability or penalty.

http://www.axaonline.com/rs/3p/sp/3007.html


Right. As long as it is not any itnerest earned.