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

A Roth IRA lets you pull out the money you put in — your contributions — whenever you want, with no tax or penalty. The earnings those contributions generated are different. You can withdraw earnings before age 59½ only in specific situations, and doing so outside those situations costs you a 10% penalty plus income tax on the earnings themselves.

The distinction between contributions and earnings is the core rule. The IRS tracks these separately in your account. When you withdraw, contributions come out first. Once contributions are exhausted, any withdrawal is treated as earnings and subject to the penalty and tax rules.

Key Takeaways

  • Contributions (money you deposited) can be withdrawn at any age with no tax or penalty, but you lose the growth potential on that money.
  • Earnings (investment gains) withdrawn before age 59½ trigger a 10% penalty and income tax unless you meet an exception like disability, medical expenses, or first-time home purchase.
  • The IRS treats withdrawals as contributions first, then earnings, so you must exhaust your contributions before any withdrawal counts as an earnings withdrawal.
  • If you have multiple Roth IRAs, the IRS combines all of them when calculating how much is contributions versus earnings.
  • Withdrawals do not reduce your annual contribution limit for future years, but they do reduce the total balance available for retirement.

Withdrawing contributions with no penalty or tax

You can withdraw your contributions in full at any time. This is the money you actually deposited into the account yourself, not the gains it earned. There is no age requirement, no penalty, and no tax owed on the withdrawal.

The catch is that you lose the tax-free growth on that money going forward. If you withdraw $5,000 in contributions at age 35, that $5,000 and all the gains it would have earned over the next 30 years are gone from your retirement account. For most people, withdrawing contributions early defeats the purpose of having a Roth IRA.

Your brokerage or bank will show you the breakdown of contributions versus earnings in your account statements. If you are unsure, contact your financial institution directly and ask for the contribution basis.

Withdrawing earnings before age 59½ and the 10% penalty

Earnings are the investment returns your contributions generated — dividends, capital gains, interest. If you withdraw earnings before you turn 59½, you owe a 10% penalty on the earnings amount plus income tax at your regular rate, unless you meet a specific exception.

The 10% penalty is calculated only on the earnings portion, not on your contributions. If you withdraw $10,000 and $7,000 is contributions and $3,000 is earnings, the penalty applies only to the $3,000. You still owe income tax on the full $3,000 in earnings.

This penalty is separate from income tax. You will owe both. The total cost of an early withdrawal of earnings can be substantial — often 30% to 40% of the earnings amount, depending on your tax bracket.

Exceptions to the 10% penalty on early earnings withdrawals

The IRS allows penalty-free withdrawals of earnings before age 59½ in these situations:

  • You are disabled (as defined by the IRS, not just any disability).
  • You are a beneficiary withdrawing after the account holder's death.
  • You have unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
  • You are paying health insurance premiums while unemployed.
  • You are a first-time homebuyer withdrawing up to $10,000 lifetime (this is a one-time limit, not annual).
  • You are withdrawing for may have access to education expenses for yourself or a dependent.
  • You have a substantially equal periodic payment plan (SEPP), which requires you to take specific amounts each year.

Even when an exception applies, you still owe income tax on the earnings. The penalty is waived, but the tax is not. For example, if you withdraw $5,000 in earnings for a first-time home purchase, you owe income tax on that $5,000 but no 10% penalty.

The definitions matter. "First-time homebuyer" means you have not owned a home in the past two years, not that you have never owned one. "may have access to education expenses" include tuition, fees, books, and room and board at an accredited school, but not room and board if the student is not at least half-time.

Roth conversions and the five-year rule

If you converted money from a traditional IRA to a Roth IRA, that converted amount has its own five-year waiting period. You can withdraw the original contributions from your Roth anytime, but converted funds must sit for five years before you can withdraw them penalty-free, even if you are over 59½.

This rule applies to each conversion separately. If you converted $10,000 in 2020 and $10,000 in 2023, the 2020 conversion is available penalty-free now, but the 2023 conversion must wait until 2028.

The five-year rule applies only to the converted amount itself, not to earnings on that converted amount. If you converted $10,000 and it grew to $12,000, you can withdraw the $10,000 anytime, but the $2,000 in earnings follows the normal early withdrawal rules.

What happens if you have multiple Roth IRAs

The IRS treats all your Roth IRAs as one account for withdrawal purposes. If you have three Roth IRAs with $20,000 in contributions across all of them and $5,000 in earnings across all of them, you can withdraw $20,000 with no penalty or tax, regardless of which account the money sits in.

When you withdraw, the IRS assumes you are taking contributions first, then earnings, across all accounts combined. You cannot choose to withdraw only from the account with the most earnings to avoid the penalty. The pro-rata rule applies: the IRS calculates your total contributions and total earnings across every Roth IRA you own, then applies the withdrawal rules to that combined total.

Frequently Asked Questions

Can I withdraw my contributions and put the money back later?

You can withdraw contributions anytime, but you cannot put that specific money back into the same Roth IRA. You can make a new contribution in a future year up to your annual limit, but it counts as a separate contribution. If you withdraw $5,000 in contributions at age 40, you do not get that $5,000 contribution room back.

Do I have to report a contribution withdrawal to the IRS?

Contribution withdrawals do not require a separate tax form or report. Your brokerage will issue a Form 1099-R showing the withdrawal, but since contributions are not taxable, you typically do not owe tax on it. Keep records of your contribution basis in case the IRS asks.

What if I withdraw earnings by mistake and did not may have access to for an exception?

You owe the 10% penalty and income tax on the earnings. You cannot undo the withdrawal. If you realize the mistake, you can file an amended tax return to report it correctly, but the penalty and tax still apply. Some people use the "return of erroneous rollover" rule if the withdrawal was within 60 days, but this is narrow and requires specific conditions.

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

Roth IRA withdrawals do not count as income for Social Security or Medicare purposes. This is one advantage of Roth accounts — withdrawals do not increase your modified adjusted gross income, which can affect Medicare premiums or Social Security taxation. Traditional IRA withdrawals do count as income for these programs.

Can I borrow from my Roth IRA instead of withdrawing?

Roth IRAs do not allow loans. You can withdraw, but you cannot borrow and repay. Some employer retirement plans like 401(k)s allow loans, but Roth IRAs do not have this option.