How Do You Withdraw Roth IRA Contributions?


Quick Answer

Roth IRA contributions can be withdrawn at any time for any reason, however, any investment earnings taken out before age 59 1/2 result in a penalty unless it is for a qualifying reason, according to CNN. The fastest way to withdraw contributions is to request an ACH transfer.

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Full Answer

An ACH transfer from a broker takes between three to four business days while a mailed request can take more than two weeks, according to U.S. News & World Report. One must have proof of the amount of contributions that have been made to the Roth IRA in order to withdraw penalty and tax-free, according to Forbes. The amount taken out over the contribution amount is subject to both income tax as well as a 10 percent penalty and, therefore, good records of contributions should be kept unless one is certain no withdrawals are going to be made until after the account holder turns 59 1/2.

Forbes.com notes that withdrawals from a Roth IRA should only be done as a last resort since tax-free compounding is lost on the amount withdrawn and that money cannot be replaced. Instead, the individual can start over with future annual contributions and try to contribute the maximum amount as well as catch-up contributions if applicable.

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