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Because you already paid taxes on the money you’ve contributed to a Roth IRA, the IRS isn’t as grumpy about letting you have it back.
In fact, you can withdraw your contributions at any time.
You won't pay taxes on withdrawals from an inherited Roth IRA as long as the original account owner held the IRA for at least 5 years.
But you will pay taxes on withdrawals from an inherited traditional IRA.
If you own a Roth IRA, you may be under the impression that withdrawals are always income-tax-free. Even worse, some withdrawals can be socked with a 10% penalty on top of the income tax bill.
Otherwise, you may pay taxes plus a 10% penalty on the earnings portion of your distribution. That means if you begin contributing to a Roth IRA at age 58, a withdrawal of earnings at 59½ wouldn’t be considered qualified; you may be taxed, unless you wait until the account meets the five-year holding rule.
You can take tax-free qualified withdrawals from that account too anytime after Jan.
1, 2013 — as long as you’re at least 59½ at the time.
For the most part, rules for Roth IRA withdrawals are more flexible than those for a 401(k) or even a traditional IRA.
But it’s important that you stick by them because not doing so could cancel out some of the Roth’s super-charged tax perks.
In addition, with a Roth IRA, you'll pay no taxes on withdrawals, provided your account has been open for at least 5 years.*With a traditional IRA, you'll owe taxes on the withdrawals of all earnings and any contributions you originally deducted from your taxes.