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

A Roth IRA lets you take out the money you put in — your contributions — at any age without taxes or penalties. The earnings those contributions grew into 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 portion.

The IRS separates your Roth account into two buckets: contributions (what you deposited) and earnings (what your investments made). The rules for each are completely different, and the IRS tracks them separately on your tax forms.

Key Takeaways

  • You can withdraw contributions you made to your Roth IRA at any time, at any age, without penalty or tax.
  • Withdrawing earnings before age 59½ triggers a 10% penalty and income tax unless you meet an exception like disability, first-time home purchase, or may have access to education expenses.
  • The IRS uses a pro-rata rule: if you withdraw money before age 59½, a portion is treated as earnings even if you only withdraw contributions, based on your total Roth balance.
  • After age 59½, you can withdraw earnings tax-free if your Roth account has been open for at least five tax years.
  • Roth IRAs have no required minimum distributions during your lifetime, so you can leave the money untouched as long as you want.

Withdrawing contributions versus earnings

The IRS distinguishes between money you put in and money your investments earned. If you contributed $5,000 and it grew to $7,000, your $5,000 is a contribution and the $2,000 is earnings. You can pull out the $5,000 anytime. The $2,000 follows the earnings rules.

This matters because many people think "I can withdraw what I put in" means they can access their full account balance. That is not how it works. If you have $7,000 total and you withdraw $5,000, the IRS does not automatically treat it as your contribution. Instead, it uses the pro-rata rule.

The pro-rata rule and why it matters

The pro-rata rule means the IRS calculates what portion of your withdrawal is contributions and what portion is earnings, based on your total Roth balance across all your Roth accounts. If you have $10,000 total in Roth IRAs and $2,000 of that is earnings, then 20% of any withdrawal is treated as earnings.

Say you withdraw $5,000. The IRS treats $4,000 as a contribution (80%) and $1,000 as earnings (20%). You owe no tax or penalty on the $4,000, but the $1,000 triggers a 10% penalty ($100) and income tax if you are under 59½ and do not meet an exception.

This rule applies even if you only withdraw contributions. The pro-rata calculation is automatic and applies to all your Roth IRAs combined, not each account separately. If you have multiple Roth accounts, add up the total balance across all of them to calculate the ratio.

Withdrawing earnings before age 59½: the exceptions

You can withdraw earnings before 59½ without the 10% penalty if you meet one of these situations. You still owe income tax on the earnings, but the penalty is waived:

  • You are disabled (as defined by the IRS).
  • You are a first-time homebuyer and withdraw up to $10,000 lifetime.
  • You use the money for may have access to education expenses for yourself or a family member.
  • You have unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
  • You pay health insurance premiums while unemployed.
  • You inherit the Roth IRA (different rules apply to beneficiaries).

Even with an exception, you still owe income tax on the earnings portion. The exception only removes the 10% penalty. You report the withdrawal on your tax return and pay tax at your ordinary income rate.

Withdrawing after age 59½

Once you turn 59½, you can withdraw earnings without the 10% penalty. However, you still owe income tax on the earnings — unless your Roth IRA has been open for at least five tax years. If it has been five years or longer, earnings come out tax-free.

The five-year rule is per account, not per person. If you opened your first Roth IRA in 2019, any Roth IRA you open in 2024 has its own five-year clock. The clock starts on January 1 of the year you made your first contribution to any Roth IRA, not the date you opened the account.

Contributions always come out tax-free at any age, so the five-year rule only affects earnings. If you are 59½ and your Roth has been open five years, you withdraw everything tax-free. If your Roth has been open only three years, contributions are tax-free but earnings are taxed.

Roth conversions and the pro-rata rule

If you converted money from a traditional IRA to a Roth IRA, the pro-rata rule still applies, but there is an additional layer. Conversions are treated as contributions for the first five years, meaning you can withdraw converted money without penalty during that five-year window (though you still owe tax if you withdraw before 59½).

After five years from the conversion date, converted money is treated like any other contribution. The pro-rata rule still applies to your total Roth balance when you calculate what portion of a withdrawal is earnings.

No required withdrawals during your lifetime

Unlike traditional IRAs, Roth IRAs have no required minimum distributions. You never have to withdraw money, even after age 72. This makes Roth accounts useful for leaving money to heirs or letting investments grow tax-free for decades.

Your beneficiaries will have different rules. They must withdraw the account within a set timeframe depending on their relationship to you and when you died, but those rules are separate from what applies to you as the account owner.

Frequently Asked Questions

Can I withdraw my contributions without paying taxes?

Yes. Contributions come out tax-free at any age. The pro-rata rule means some of your withdrawal may be treated as earnings, but the contribution portion is never taxed. You do not need to meet any exception or reach any age threshold for contributions.

What happens if I withdraw earnings before 59½ and do not meet an exception?

You owe a 10% penalty on the earnings portion plus income tax at your ordinary rate. If you withdraw $5,000 and $1,000 is earnings, you pay $100 in penalty plus income tax on the $1,000. The contribution portion ($4,000) is not penalized or taxed.

Does the five-year rule apply to contributions or earnings?

The five-year rule applies only to earnings. Contributions can always come out tax-free. The five-year clock starts January 1 of the year you made your first Roth contribution, and it must have passed before earnings are tax-free at age 59½.

If I have multiple Roth IRAs, do I calculate the pro-rata rule for each one separately?

No. The pro-rata rule uses your total balance across all Roth IRAs combined. Add up the balance in every Roth account you own to calculate what percentage of your withdrawal is earnings. The IRS treats all your Roth IRAs as one account for this purpose.

Can I borrow from my Roth IRA?

No. Roth IRAs do not allow loans. You can only withdraw money. If you need temporary access to funds, you must withdraw, which triggers the pro-rata rule and may result in taxes and penalties depending on your age and the withdrawal amount.