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

A Roth IRA lets you pull out the money you put in — your contributions — at any age without penalty or taxes. The earnings those contributions generated are different: you cannot touch them before age 59½ without paying income tax plus a 10 percent penalty, with a few narrow exceptions. The account must also have been open for at least five tax years before you can withdraw earnings tax-free, even at 59½.

The five-year rule is per account, not per person. If you open a Roth IRA today and fund it, that clock starts now. If you roll money from another Roth IRA into this one, a separate five-year clock may apply to the rolled-over amount depending on when that original account opened.

The IRS distinguishes between contributions and earnings because Roth accounts are funded with after-tax dollars. You already paid income tax on the money going in, so the IRS lets you take it back without penalty. Earnings, however, have never been taxed, so they are locked until you meet both the age and the five-year test.

Key Takeaways

  • You can withdraw contributions (the money you deposited) from a Roth IRA at any time, at any age, without taxes or penalties.
  • Withdrawing earnings before age 59½ triggers a 10 percent penalty plus income tax on the amount withdrawn, unless an exception applies.
  • The five-year rule requires your Roth IRA to have been open for at least five tax years before you can withdraw earnings tax-free, even after age 59½.
  • Certain hardships — first-time home purchase, disability, medical expenses, and a few others — let you withdraw earnings early without the 10 percent penalty, though income tax still applies.
  • If you inherit a Roth IRA, different withdrawal rules apply to you as a beneficiary, and the five-year rule may reset depending on your relationship to the account owner.

Withdrawing contributions versus earnings

The IRS tracks contributions and earnings separately in your Roth IRA. When you withdraw money, contributions come out first. Once you have withdrawn all your contributions, any further withdrawal is treated as earnings.

You do not have to do anything to separate them yourself. Your Roth IRA custodian (the bank, brokerage, or investment firm holding the account) keeps the record. When you request a withdrawal, they will tell you how much is contribution and how much is earnings, and they will withhold taxes if needed.

This matters because it means you can access your own money without penalty even if your account has grown significantly. If you put in $5,000 a year for ten years ($50,000 total) and the account is now worth $75,000, you can withdraw the full $50,000 in contributions anytime without any tax or penalty, regardless of your age.

The five-year rule for earnings

Before you can withdraw earnings tax-free, your Roth IRA must have been open for at least five tax years. This is separate from your age. You could be 70 years old, but if your Roth IRA opened only two years ago, you cannot withdraw earnings without paying income tax on them.

The five-year period starts on January 1 of the tax year in which you opened the account. If you opened a Roth IRA on December 15, 2023, the five-year clock started January 1, 2023. If you opened it on January 2, 2024, the clock started January 1, 2024. The clock runs regardless of whether you fund the account immediately or leave it empty.

If you have multiple Roth IRAs, each one has its own five-year clock. However, if you roll money from one Roth IRA into another, the receiving account uses the older account's opening date for the five-year rule. This protects you from resetting the clock by moving money around.

Exceptions that let you withdraw earnings early

The IRS allows you to withdraw earnings before age 59½ without the 10 percent penalty in specific situations. Income tax on the earnings still applies — the penalty is what gets waived. These exceptions are:

  • First-time home purchase: Up to $10,000 lifetime (not per year) for buying, building, or rebuilding a primary residence. You must not have owned a home in the two years before the withdrawal.
  • Disability: You are unable to work due to a physical or mental condition expected to last indefinitely or result in death.
  • Medical expenses: Unreimbursed medical costs that exceed 7.5 percent of your adjusted gross income in that tax year.
  • Health insurance premiums: If you are unemployed and paying premiums for yourself, your spouse, or dependents.
  • Substantially equal periodic payments (SEPP): You set up a series of equal withdrawals based on your life expectancy. Once started, you must continue for five years or until age 59½, whichever is longer.
  • IRS levy: The IRS has seized funds from your account to pay back taxes.

Even with these exceptions, you still owe income tax on the earnings withdrawn. The $10,000 home-purchase limit is a lifetime cap across all your Roth IRAs combined, not per account. If you withdrew $6,000 for a home purchase from one Roth IRA years ago, you have only $4,000 left to use across all your Roth accounts.

What happens at age 59½

Once you reach 59½ and your Roth IRA has been open for five tax years, you can withdraw earnings without penalty or tax. This is the standard rule with no exceptions needed. You can take out as much or as little as you want, whenever you want.

If you reach 59½ but your account has not been open five years yet, you can still withdraw contributions penalty-free, but earnings remain locked until the five-year mark passes. For example, if you opened a Roth IRA at age 58 and funded it, you could withdraw contributions at 59½, but earnings would be taxed and penalized until the account turned five years old.

Unlike traditional IRAs, Roth IRAs have no required minimum distributions (RMDs). You are never forced to withdraw money. Your account can keep growing tax-free for as long as you live, and you can pass it to heirs.

Inherited Roth IRAs and beneficiary rules

If you inherit a Roth IRA from someone else, you are a beneficiary, and different withdrawal rules apply to you. The rules depend on your relationship to the account owner and when they died.

If the original owner died before taking required distributions, you may be required to withdraw the entire account within a set timeframe — usually ten years for most beneficiaries under current rules, though this changed in 2023. Spouses have more flexibility and can treat the inherited Roth as their own. Children and other beneficiaries generally cannot.

The five-year rule for the original account still applies. If the deceased opened their Roth IRA only two years before dying, you cannot withdraw earnings tax-free even if you are over 59½. The five-year clock continues from when they opened it, not from when you inherited it.

Roth conversions and the pro-rata rule

If you convert money from a traditional IRA to a Roth IRA, that converted amount is treated as a contribution for withdrawal purposes — you can pull it back without penalty. However, the five-year rule applies separately to conversions. You cannot withdraw a conversion without penalty until five tax years have passed since the conversion, even if you are over 59½.

This five-year rule is per conversion, not per account. If you convert $5,000 in 2024 and another $5,000 in 2025, each conversion has its own five-year clock. You could withdraw the 2024 conversion penalty-free in 2029 but would still owe a penalty on the 2025 conversion until 2030.

The pro-rata rule also affects conversions. If you have both pre-tax and after-tax money in traditional IRAs, converting to a Roth means a portion of the conversion is taxable based on your total traditional IRA balance. This is a tax calculation issue, not a withdrawal rule, but it affects how much tax you owe on the conversion itself.

Frequently Asked Questions

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

You do not owe taxes on contributions, so you do not report the withdrawal as income. However, your custodian may issue a Form 1099-R if the withdrawal is large enough. Keep records of your contributions (Form 5498 statements) to prove to the IRS that the money you withdrew was not earnings if you are ever audited.

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

You owe income tax on the earnings at your ordinary tax rate, plus a 10 percent penalty. If you withdrew $2,000 in earnings and you are in the 22 percent tax bracket, you would owe $440 in tax plus $200 in penalty, totaling $640. The penalty is calculated on the earnings amount, not the total withdrawal.

Does the five-year rule reset if I close and reopen a Roth IRA?

No. The five-year rule is based on when you first opened any Roth IRA, not on the current account. If you opened a Roth in 2020, closed it in 2022, and opened a new one in 2023, the five-year clock still started in 2020. Closing an account does not restart the timer.

Can I borrow from my Roth IRA?

No. The IRS does not allow loans from Roth IRAs. You can only withdraw. If you take money out and put it back within 60 days, it is treated as a rollover, not a loan, and you can do this only once per 12-month period across all your IRAs combined.

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

You can withdraw contributions anytime without penalty. If you need more than your contributions, you can use the SEPP exception to set up equal periodic payments, though this locks you into a payment schedule for at least five years. Otherwise, early withdrawal of earnings means paying tax and penalty.