You can withdraw your contributions anytime, but earnings have strict rules

The core rule is simple: you can pull out the money you put in (your contributions) whenever you want, with no penalty and no tax. The earnings those contributions generated are a different story — they're locked until you're 59½, with narrow exceptions. The IRS tracks these separately, so you need to know which bucket you're drawing from.

This matters because taking earnings out early usually costs you 10% of the withdrawal amount as a penalty, plus income tax on those earnings. The exceptions exist, but they're specific: first-time home purchase, may have access to education expenses, disability, medical bills, and a few others. If your reason doesn't fit, you'll pay the penalty.

Key Takeaways

  • You can withdraw contributions (the money you deposited) at any age without penalty or tax, but the IRS needs to know you're taking contributions, not earnings.
  • Earnings cannot be withdrawn penalty-free until age 59½, even if you've had the account for decades, unless you meet a specific exception like first-time home purchase or disability.
  • The 10% early withdrawal penalty applies to earnings only, not contributions, but you still owe income tax on the earnings themselves.
  • If you convert a traditional IRA to a Roth, a five-year waiting period applies to the converted amount before you can withdraw it penalty-free.
  • The IRS uses a specific calculation (pro-rata rule) if you have both Roth and traditional IRAs, which can make early Roth withdrawals more expensive than expected.

How the IRS separates contributions from earnings

When you file your tax return, you report Roth contributions on Form 8606. The IRS keeps a running total of how much you've put in over your lifetime. When you withdraw money, the IRS assumes you're taking contributions first — up to the total you've reported — before any earnings come out. This is called the ordering rule.

The practical effect: if you contributed $50,000 over ten years and your account is now worth $65,000, you can withdraw $50,000 with no penalty or tax. The $15,000 in earnings stays locked until 59½ (or until an exception applies). You don't have to do anything special to claim this — just withdraw the money and report it correctly on your tax return.

Keep records of every contribution you make. If you can't prove how much you put in, the IRS will assume everything you withdraw is earnings, and you'll face penalties and tax on amounts that should have been tax-free.

Earnings withdrawals before 59½: the exceptions

The IRS allows penalty-free (but not tax-free) withdrawal of earnings in these situations:

  • First-time home purchase: Up to $10,000 lifetime for you or your spouse. You must not have owned a home in the past two years.
  • may have access to education expenses: Tuition, fees, books, supplies, and room and board for you, your spouse, or your children or grandchildren at an accredited school.
  • Disability: If you become unable to work before 59½, you can withdraw earnings penalty-free (but still owe tax on them).
  • Medical expenses: Unreimbursed medical bills that exceed 7.5% of your adjusted gross income in that year.
  • Health insurance premiums: If you're unemployed and paying for your own health insurance.
  • Substantially equal periodic payments (SEPP): A complex calculation that lets you take a fixed amount each year before 59½ without penalty, but you must follow the rules exactly or face back penalties.

Even with these exceptions, you still owe income tax on the earnings you withdraw. The penalty is waived, but the tax bill is not. For example, if you withdraw $15,000 in earnings for education expenses and you're in the 22% tax bracket, you'll owe $3,300 in tax on that withdrawal.

Converted IRAs and the five-year rule

If you convert money from a traditional IRA to a Roth (a backdoor Roth or pro-rata conversion), the converted amount is subject to a separate five-year holding period. You cannot withdraw the converted funds penalty-free until five years have passed, even if you're already 59½.

The five-year clock starts on January 1 of the year you convert. If you convert $50,000 in March 2024, you can withdraw it penalty-free starting January 1, 2029. If you withdraw it before then, you'll pay the 10% penalty on the converted amount (though not on contributions you made directly to the Roth).

This rule applies to each conversion separately. If you convert $20,000 in 2024 and another $20,000 in 2025, each has its own five-year clock. The contributions you made directly to the Roth are not affected by this rule — they can come out anytime.

The pro-rata rule and why it matters

If you have both a traditional IRA and a Roth IRA, the IRS treats them as one account for the purpose of calculating early withdrawals. This is the pro-rata rule, and it can make a backdoor Roth much more expensive than you expect.

Here's the scenario: you have a traditional IRA with $100,000 in pre-tax money. You want to do a backdoor Roth by converting $7,000 of new money. You think you can then withdraw the $7,000 penalty-free. But the IRS says no — 93% of your total IRA balance is pre-tax money, so 93% of your withdrawal is treated as pre-tax earnings. You'll owe the 10% penalty on $6,510 of that withdrawal, plus income tax on the entire $7,000.

The pro-rata rule applies even if the traditional IRA is in a different account at a different bank. The IRS doesn't care — it adds up all your IRAs and calculates the ratio. If you're planning a backdoor Roth and you have a traditional IRA, talk to a tax professional first. You may need to roll the traditional IRA into a 401(k) to avoid this trap.

Withdrawals at 59½ and beyond

Once you turn 59½, you can withdraw both contributions and earnings penalty-free. You still don't owe tax on the earnings if the account has been open for at least five tax years (a separate five-year rule from the conversion rule). If the account is less than five years old, you'll owe income tax on the earnings, but not the 10% penalty.

There is no required minimum distribution (RMD) on a Roth IRA during your lifetime. Unlike a traditional IRA, you don't have to start taking money out at 73. This makes a Roth a powerful tool for leaving money to heirs — they inherit the account and the tax-free growth continues.

Inherited Roth IRAs and the SECURE Act

If you inherit a Roth IRA from someone other than your spouse, the rules changed in 2023. You must withdraw the entire balance within ten years, though you don't have to take it all at once. The money comes out tax-free if the original owner had the account open for at least five tax years.

If you inherit from your spouse, you have more options: you can treat it as your own, roll it into your own Roth, or keep it as an inherited account. Spousal inherited Roths are more flexible than non-spousal ones, so the strategy matters.

Frequently Asked Questions

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

You still have to report it on Form 8606 when you file your tax return, even though you won't owe tax or penalty. The IRS uses this form to track your contribution basis. If you don't file the form, the IRS may assume you withdrew earnings and assess penalties and tax you don't actually owe.

What happens if I withdraw earnings by mistake and think they're contributions?

You'll owe the 10% penalty and income tax on the earnings when you file your return. If you realize the mistake within 60 days, you can put the money back (a rollover) and avoid the penalty, though you'll still owe tax on any gains. After 60 days, you're stuck with the penalty unless an exception applies.

Does the five-year rule apply to contributions I made directly to the Roth?

No. The five-year rule applies only to converted money and to earnings. Contributions you made directly to a Roth can come out anytime, at any age, with no penalty or tax.

Can I borrow from my Roth IRA instead of withdrawing?

No. IRAs do not allow loans. You can only withdraw or roll over the money. If you need temporary access to cash, a withdrawal is your only option, and it comes with the penalties and tax rules described here.

What if I need money for an emergency but don't fit any exception?

You can withdraw contributions penalty-free and tax-free. If you need more than that, you can withdraw earnings, but you'll owe the 10% penalty plus income tax. There's no hardship exception for Roth IRAs like there is for 401(k)s — the exceptions listed above are the only ones.