You can withdraw your contributions anytime, but earnings have rules

You can pull out the money you put into a Roth IRA whenever you want, with no penalty and no taxes owed. The IRS calls this your basis — it is simply the dollars you deposited yourself. Withdrawing earnings (the investment gains on top of your contributions) is different: the IRS charges a 10% penalty on earnings withdrawn before age 59½, plus income tax on those earnings, unless you meet a narrow set of exceptions.

The catch is that the IRS does not let you pick which dollars you are taking out. If you withdraw $5,000 and you have $3,000 in contributions and $2,000 in earnings, the IRS assumes you are withdrawing contributions first. Once your contributions are gone, any further withdrawals count as earnings and trigger the penalty and tax — even if you do not touch the earnings themselves.

Roth IRAs also have a separate rule for earnings: you must have held the account for at least five tax years before you can withdraw earnings tax-free, even if you are over 59½. This five-year clock starts on January 1 of the year you made your first contribution to any Roth IRA.

Key Takeaways

  • You can withdraw contributions (the money you deposited) from a Roth IRA at any age without penalty or tax.
  • Withdrawing earnings before age 59½ triggers a 10% penalty plus income tax, unless you meet an IRS exception like disability or a first-time home purchase.
  • The IRS assumes you withdraw contributions first, so you must exhaust contributions before earnings are treated as withdrawn.
  • Earnings can only be withdrawn tax-free if you are 59½ or older and have held the Roth IRA for at least five tax years.
  • Conversions from traditional IRAs follow their own five-year rule and may be subject to a 10% penalty if withdrawn within five years.

How the IRS tracks contributions versus earnings

The IRS uses what is called the pro-rata rule to determine which part of your withdrawal is contributions and which is earnings. If you have multiple Roth IRAs, the IRS treats them as one account for this purpose — you cannot withdraw from one account while leaving earnings untouched in another.

To calculate your basis, add up all the contributions you have made to all your Roth IRAs across all years. Then add up the total value of all your Roth IRAs. The ratio of contributions to total value tells the IRS what percentage of any withdrawal is contributions versus earnings. For example, if you have $10,000 in contributions and $15,000 in earnings across all your Roth IRAs (total $25,000), then 40% of any withdrawal is treated as contributions and 60% as earnings.

This matters because it means you cannot simply withdraw earnings from one account and leave contributions in another. The rule applies across all your Roth IRAs together. If you want to withdraw only contributions, you need to know your total basis across every Roth account you own.

Exceptions that let you withdraw earnings without penalty

The IRS allows you to withdraw earnings without the 10% penalty in a few specific situations, though you still owe income tax on the earnings themselves. These exceptions are: disability, medical expenses over 7.5% of your adjusted gross income, a first-time home purchase (up to $10,000 lifetime), health insurance premiums while unemployed, and may have access to education expenses.

A first-time home purchase is the most common exception. You can withdraw up to $10,000 in earnings (lifetime, not per year) to buy, build, or rebuild a home if you have not owned a home in the past two years. The money must be used within 120 days of withdrawal. Education expenses include tuition, fees, books, supplies, and room and board for you or a dependent, at any accredited school.

Even with an exception, you still owe income tax on the earnings withdrawn. You do not owe the 10% penalty, but the earnings count as taxable income for that year. You will report the withdrawal on your tax return, and your tax bill will increase by your marginal tax rate times the earnings withdrawn.

The five-year rule for Roth conversions

If you converted money from a traditional IRA to a Roth IRA, that conversion has its own five-year clock. You cannot withdraw the converted amount without a 10% penalty until five tax years have passed, even if you are over 59½. This is separate from the five-year rule for earnings.

For example, if you convert $20,000 in 2024, you cannot withdraw that $20,000 without penalty until 2029 (five tax years: 2024, 2025, 2026, 2027, 2028). If you withdraw it in 2025, you owe a 10% penalty on the full $20,000, plus income tax on any earnings that conversion generated. The five-year clock resets for each conversion you make.

Contributions you made directly to a Roth IRA do not have this conversion five-year rule — only conversions do. If you mix direct contributions and conversions in the same account, the pro-rata rule applies to determine which is which when you withdraw.

How to request a withdrawal from your Roth IRA provider

Contact your Roth IRA custodian — the bank, brokerage, or investment firm holding your account — and request a withdrawal. Most providers let you do this online, by phone, or by mail. You will need to specify the amount and whether you want the money sent to your bank account or issued as a check.

The custodian will process the withdrawal and send you a Form 1099-R for tax reporting. This form shows the gross amount withdrawn and how much was a distribution of basis versus earnings. Keep this form for your records and give it to your tax preparer or use it when filing your own return.

There is no waiting period for Roth IRA withdrawals — the money can be sent to you within a few business days. Unlike some retirement accounts, you do not need your employer's permission or approval from the IRS. Your custodian simply processes the request and sends the funds.

What happens if you withdraw earnings before 59½ without an exception

If you withdraw earnings before age 59½ and do not meet an exception, you owe two things: a 10% penalty on the earnings withdrawn, and income tax on those earnings at your ordinary tax rate. The penalty is calculated on the earnings amount only, not on your contributions.

For example, if you withdraw $5,000 that includes $2,000 in earnings, you owe 10% of $2,000 ($200) as a penalty, plus income tax on $2,000 at your marginal rate. If you are in the 22% tax bracket, that is another $440 in tax, for a total of $640 out of the $2,000 in earnings. The $3,000 in contributions is not penalized or taxed.

Your custodian will not withhold the penalty automatically — you owe it when you file your tax return. If you do not pay it, the IRS will pursue it as unpaid tax debt. Some people make the mistake of thinking the penalty is optional or that they can avoid it by not reporting the withdrawal; the Form 1099-R your custodian sends to the IRS will flag the withdrawal, and the IRS will calculate the penalty if you do not.

Roth conversions and the pro-rata rule trap

If you have both a traditional IRA and a Roth IRA, converting money from the traditional to the Roth can create a tax problem if you later withdraw from your traditional IRA. The pro-rata rule applies to all your IRAs together — traditional and Roth combined — when calculating how much of a withdrawal is pre-tax versus after-tax money.

This matters because it means you cannot convert a traditional IRA to a Roth, withdraw the conversion, and avoid taxes. If you have $50,000 in a traditional IRA and convert $10,000 to a Roth, then withdraw $10,000 from your traditional IRA, the IRS treats the withdrawal as 83% pre-tax money (the $50,000 remaining in the traditional IRA) and 17% after-tax money (the $10,000 you converted). You end up owing tax on most of the withdrawal even though you converted it.

This is called the pro-rata trap, and it catches people who are trying to do a "backdoor Roth" conversion. If you have a large traditional IRA balance, converting to a Roth and then withdrawing does not work the way many people expect. Talk to a tax professional before converting if you have significant pre-tax IRA balances.

Frequently Asked Questions

Can I withdraw my contributions without reporting it to the IRS?

You still need to report the withdrawal on your tax return using Form 1099-R, which your custodian sends to the IRS. However, because contributions are not taxable, you will not owe tax on them. The IRS wants to see the withdrawal reported so it can verify you are not withdrawing earnings and claiming they are contributions.

What if I need money before age 59½ but do not meet an exception?

You can withdraw your contributions without penalty. If you need more than your contributions, you can withdraw earnings, but you will owe a 10% penalty plus income tax on the earnings. Some people take a loan from their Roth IRA instead, though this requires a specific account structure and has its own rules — ask your custodian if this option is available.

Does the five-year rule apply to each Roth IRA separately or to all of them together?

The five-year rule applies to all your Roth IRAs together. The clock starts on January 1 of the year you made your first contribution to any Roth IRA. Once five tax years have passed, you can withdraw earnings from any of your Roth IRAs tax-free (if you are 59½ or older). You do not need a separate five-year clock for each account.

Can I withdraw money from a Roth IRA I inherited?

Yes, but the rules are different for inherited Roth IRAs. You can withdraw contributions anytime without penalty. Earnings have the same five-year rule and age 59½ rule, but the five-year clock is based on when the original account owner opened the account, not when you inherited it. Consult a tax professional, because inherited IRAs have additional rules depending on whether you are a spouse or non-spouse beneficiary.

Will withdrawing contributions affect my ability to contribute in the future?

No. Your annual contribution limit is based on your income, not on your account balance. If you withdraw $5,000 in contributions, you can still contribute up to the annual limit ($7,000 or $8,000 depending on age, as of 2024) in future years. Withdrawals do not reduce your contribution room.