Roth distributions
My Name is Victor65. I am 73 and am starting my first Roth with a $6000 contribution. I am confused as to the allowed distributions from growth in the account. Do I have to wait 5 years to remove any distributions not in my starting basis to avoid tax conseqenses? Also what penalties apply? Thank you.
Permalink Submitted by Alan Spross on Tue, 2010-09-14 21:00
Victor,
Until the 5 years has passed from 1/1 of the year of your first Roth contribution, you can withdraw all your contributions tax and penalty free, but once you have taken out those contributions, any earnings that remain would be subject to tax, but not penalty since you are over 59.5.
So you could withdraw your $6,000 contribution any time you wanted tax and penalty free. But any additional amounts in your account would be earnings and they would be taxed if you took them out prior to 1/1/2015. After that your entire Roth would fully qualified and tax free.
I assume you still have earned income or earned income from a spouse in order to make your regular Roth contribution. But if your total income is over 105k, it may be too high to make that contribution. If over 105k please advise AGI, joint AGI if you are married.