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kapil81 asks:

"What are the rules for withdrawing money from ROTH IRA without paying penalty of 10% before age 59.5? From what I have heard its 5 years from your first contribution. So does that mean I could withdraw all my money in ROTH after 5 years and not pay a single penny in taxes or penalty?


I'm no expert, but here's what I believe to be the case. I'll let someone who really knows correct me.

First, you may withdraw contributions at any time without tax or penalty, period.

Second, unless you are at least 59 1/2 and the funds have been in the Roth for at least 5 years, you may not withdraw earnings without paying the 10% penalty. Exceptions apply for things like education, first home (as with traditional IRA).

Third, conversions, I believe, are subject to the 5-year rule also.

So, no, you may not withdraw all your Roth money 5 years after your first contribution.

I trust someone can verify or correct what I've told you.

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