Roth IRA Basics – distribution basics

Your account is composed of: 1. Contributions, 2. Earnings. Contributions to a Roth IRA can be distributed to the creator any time.
Earningswithout owing taxes or penalties:
  1. you have to be at least 59½ years old
  2. and the account has to be five years old.
  3. even if you’re already 59½, you have to have established and held the Roth for at least five tax years. That is basically the 5-year rule for Roths.
The 5-year rule only limits when you can withdraw your earnings from your Roth IRA. That means the interest, dividends, capital gains, and any other income your Roth investments have accumulated. Contributions are not limited – these were after-tax already, ie: there was no deduction when you deposited them.
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