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

A Roth IRA contribution — the money you put in yourself — can be withdrawn at any time, at any age, with no tax or penalty. The earnings that money made inside the account 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 key distinction is between what you contributed and what the account earned. The IRS tracks these separately. When you withdraw, contributions come out first. Once contributions are exhausted, any withdrawal pulls from earnings, and that is where the rules tighten.

Key Takeaways

  • Contributions you made yourself can be withdrawn anytime without tax or penalty, regardless of your age or how long the money has been in the account.
  • Earnings (the growth your money made) cannot be withdrawn before age 59½ without a 10% penalty and income tax, except in narrow situations like disability or a first home purchase.
  • The IRS considers contributions withdrawn before earnings, so you exhaust your contribution balance first before touching earnings.
  • Roth conversions from traditional IRAs have a separate five-year rule: you must wait five years from the conversion date before withdrawing the converted amount without penalty.

Withdrawing contributions versus earnings

Your Roth IRA statement shows your contribution basis — the total amount you have deposited over the years. This number is your penalty-free withdrawal cushion. If you contributed $5,000 per year for ten years, your basis is $50,000. You can withdraw that $50,000 at any time without IRS consequences.

Anything above that basis is earnings. If your account is now worth $75,000, the $25,000 difference is earnings. Those earnings are locked until age 59½ unless you meet an exception. Withdrawing $10,000 from that $75,000 account means $10,000 comes from your $50,000 contribution basis first, leaving $40,000 in contributions and $25,000 in earnings still inside.

The IRS does not let you choose which portion to withdraw. Contributions always come out first. This is called the "ordering rule," and it protects your access to your own money while keeping earnings inside the account to grow tax-free.

Exceptions that let you withdraw earnings early

The IRS allows withdrawal of earnings before 59½ without the 10% penalty in these situations: you are disabled, you are a first-time homebuyer (up to $10,000 lifetime), you have substantial and equal periodic payments (SEPP), or you are withdrawing to pay certain medical expenses or health insurance premiums while unemployed.

Disability means you cannot engage in substantial gainful activity due to a physical or mental condition. You will need medical documentation. A first-time homebuyer is someone who has not owned a home in the past two years; the $10,000 limit is per person, per lifetime, and applies to you, your spouse, or your children or grandchildren if you are helping them buy.

SEPP is a series of substantially equal payments calculated using IRS formulas. Once you start SEPP, you must continue for five years or until age 59½, whichever is longer. If you stop early, the IRS recalculates and charges penalties retroactively. Medical expenses must exceed 7.5% of your adjusted gross income, and health insurance premiums apply only if you are unemployed and have received unemployment benefits for at least 12 consecutive weeks.

Even with an exception, you still owe income tax on the earnings portion. The 10% penalty disappears, but the tax does not. If you withdraw $15,000 in earnings under the first-time homebuyer exception, you report that $15,000 as income on your tax return that year.

The five-year rule for Roth conversions

If you converted money from a traditional IRA to a Roth IRA, that converted amount has its own five-year holding period. You must wait five years from the conversion date before withdrawing the converted portion without penalty. This is separate from the contribution rule.

Example: You convert $30,000 from a traditional IRA to a Roth in January 2024. You cannot withdraw that $30,000 without penalty until January 2029, even though it is now in a Roth account. If you withdraw it in 2027, you pay a 10% penalty on the converted amount, plus income tax.

The five-year clock resets for each conversion. If you convert again in 2025, that new conversion has its own five-year period starting in 2025. Contributions you make directly to the Roth (not conversions) do not have this five-year rule — they follow the basic contribution rule instead.

What happens if you withdraw earnings early without an exception

Withdrawing earnings before 59½ outside an exception costs you two things: a 10% penalty on the earnings amount, plus income tax at your ordinary tax rate. If you are in the 22% tax bracket and withdraw $5,000 in earnings, you owe $500 in penalty plus $1,100 in income tax, totaling $1,600.

You report the withdrawal on Form 8606 when you file your tax return. The IRS uses this form to track your contribution basis and ensure you are not withdrawing more than you contributed without accounting for the penalty and tax.

The penalty is in addition to the tax, not instead of it. This is why withdrawing earnings early is expensive even if you think you can afford the tax bill.

How to know your contribution basis

Your Roth IRA custodian (the bank, brokerage, or financial institution holding your account) should provide an annual statement showing contributions received that year. Over time, these add up to your total basis. If you have moved accounts or had multiple Roth IRAs, you need to add up the contributions across all of them.

The IRS also tracks this. Form 5498 is filed by your custodian each year and reports contributions you made. Keep copies of your Forms 5498 and your account statements. If you ever withdraw and the IRS questions your basis, these documents prove how much you contributed.

If you cannot locate old statements, contact your current custodian. They may have records going back several years. If accounts have closed, the institution that held them may still have archived records available by request.

Frequently Asked Questions

Can I withdraw my contributions if I am under 59½?

Yes. Contributions you made yourself can be withdrawn at any age without penalty or tax. Only earnings are restricted before age 59½. Make sure you know your contribution basis so you do not accidentally withdraw earnings, which would trigger the 10% penalty and income tax.

What if I need money and I am not sure if it is contributions or earnings?

Ask your custodian for a statement showing your contribution basis and current account value. Subtract basis from value to find earnings. When you withdraw, contributions come out first automatically, so if your basis is $40,000 and you withdraw $30,000, you are still within contributions and face no penalty.

Do I have to pay taxes on contributions I withdraw?

No. Contributions are not taxed when withdrawn because you already paid tax on that money before putting it in the Roth. Only earnings are taxed, and only if withdrawn before age 59½ outside an exception.

If I convert a traditional IRA to a Roth, when can I withdraw it?

Converted amounts must stay in the Roth for five years from the conversion date before withdrawal without penalty. After five years, you can withdraw the converted amount penalty-free, though you still owe tax on any earnings the converted money made inside the Roth if you withdraw before age 59½.

What if my Roth IRA has lost money — can I still withdraw my contributions?

Yes. Your contribution basis does not change based on account performance. If you contributed $20,000 and the account is now worth $15,000, you can still withdraw $20,000 in contributions (though you would be withdrawing some earnings at that point). The basis is what you put in, not what it is worth now.