Withdrawal rules for Roth individual retirement accounts, or IRAs, include holders must meet the five-year aging requirement, where investors withdraw money five years after the date of inception, and holders must be 59 ½ years old or disabled, explains Fidelity. First-time homebuyers may withdraw money early from their Roth IRAs.
Both traditional and Roth IRAs are retirement savings accounts; therefore, IRA holders incur penalties when they take money out of their accounts early, according to Fidelity. Early withdrawals cause the holders of IRAs to lose important tax benefits, including their tax-free status for any income earned after retirement, which is the key benefit of Roth IRAs. Any early withdrawals exceeding the amount of the original contributions are considered earnings and subject to taxes and penalties. Early withdrawals on Roth IRAs also cost investors a 10 percent early withdrawal penalty.
Upon retirement, Roth IRA holders can withdraw money, known as qualified distributions, at any time for any reason, reports CNN Money. Roth IRA holders who are 70 ½ years or older may withdraw money with no taxes and no penalties. However, holders who are between 59 ½ and 70 ½ years old are subject to taxes if they have not met the five-year aging requirement.