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Hi

Does anyone here know the rules for taking money out of a Roth IRA? Articles in the Fool retirement section says:

At:
http://www.fool.com/ira/rothvreg.htm
it says:
Choose a Roth IRA if you can do without the tax break right now. It's a more flexible instrument, because:
1. It allows you to withdraw your contributions at any time, penalty- and tax-free.
2. You do not have to take mandatory distributions at age 70 1/2.

Then at:
http://www.fool.com/money/allaboutiras/allaboutiras07.htm
It says:
Unless an exception applies, most distributions from a Roth IRA before the owner reaches age 59 1/2 will be subject to an "early withdrawal penalty" of 10% on the amount of the distribution.


So what's this discrepancie about? "Penalty- and tax free" vs. "penalty of 10%"?

Thanks,
RBM


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So what's this discrepancie about? "Penalty- and tax free" vs. "penalty of 10%"?

You can withdraw the money that you have contributed "Penalty and tax free", but you must leave any earnings in until you are 59 1/2 or you will pay a 10% penalty. At least that is the way that I understand it. See the article on TMF homepage entitle "Roth IRA as Emergency Fund" for more info.
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I meant to include a link before posting. Here is the Roth IRA as Emergency Fund article.

http://www.fool.com/news/commentary/2004/commentary040317RB.htm
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