The rules for Roth IRA withdrawals depend on the ages of the account owner and the account itself, explains Charles Schwab. People who are 59 or younger may face a 10-percent penalty for Roth IRA distributions, explains Fidelity. As of 2014, there aren't penalties for withdrawals between the ages of 59 1/2 and 70, although there are penalties for not withdrawing once the owner reaches 70 1/2 years old.Continue Reading
People of any age may withdraw from a Roth IRA without additional penalties if the account is older than five years and the payment is intended for certain approved purchases, such as a first-home purchase, medical bills and insurance while unemployed, and qualifying educational expenses, explains Fidelity.
Those who are 59 years old and younger face a 10-percent penalty if not using the Roth IRA distribution for approved types of purchases, explains Charles Schwab. Those who are 59 or younger who are withdrawing from a Roth IRA account that is less than five years old face additional taxes as well as potential penalties.
Withdrawals made by an account owner who is between 59 1/2 and 70 years old are not subject to penalties. However, taxes still apply to distributions from Roth IRA accounts that are less than five years old, says Fidelity.
Once an account owner reaches 70 1/2, withdrawals from a Roth IRA are mandatory. Owners who fail to withdraw the minimum required distribution incur extra penalties, explains Fidelity.Learn more about Financial Planning
Roth IRA account holders of any age can withdraw contributions at any time without taxes or penalties, reports About.com. However, earnings on contributions to Roth accounts are subject to early withdrawal penalties unless the distribution qualifies for an exception.Full Answer >
In many respects, the Roth and traditional 401(k) individual retirement accounts (IRA) are very similar, and the main difference between the two has to do with taxes; with a Roth 401(k), the account holder pays contributions into her account with after-tax income, while contributions to a traditional 401(k) are based on pre-tax income, as described by Charles Schwab. Retirees with a traditional 401(k) must pay taxes on withdrawals from the account, but those with a Roth 401(k) can make withdrawals without paying taxes as long as the account has been open for 5 or more years and those withdrawals occur after age 59 1/2.Full Answer >
There are circumstances where early withdrawals from a Roth IRA are penalty-free, states Fidelity. However, there are specific requirements to meet in order to withdraw funds, including the age of the Roth IRA and the age of the account holder.Full Answer >
Roth 401(k) withdrawals are either qualified or unqualified, depending on the age of the account holder and the number of years since the first contribution, explains Investopedia. The earnings portion of unqualified withdrawals is taxable and possibly subject to a 10 percent penalty, states Oblivious Investor.Full Answer >