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Roth IRAs are complex for the would-be early retiree:

Withdrawals of contributions - tax free, penalty free
Early withdrawal of earnings - taxed as ordinary income, possibly subject to penalty
Fully qualifying withdrawal of earnings - tax free, penalty free

And that's not even all the cases!

Early withdrawal of earnings via SEPP 72(t) plan - taxed as ordinary income, not penalized
Withdrawal of amounts converted from traditional to Roth:
- before 5 years from conversion time, tax free but penalized (you paid tax at conversion time)
- after 5 years from conversion time, tax free and penalty free (treated like contributions)

In almost all scenarios, an early retiree should make every effort to withdraw from a Roth only contributions and sufficiently-aged conversions. Leave the earnings until after age 59.5.

- Erik
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