Roth IRA distributions

Submitted by Kevin Dempsey on Wed, 2024-07-17 11:33

Client is now 60 years old.  She made a $5000 Roth Contribution in 2018, then started $500 monthly investments at the beginning of 2020.  Total investments to date are $32,500 and account value is $50,000.  How much of a tax free distribution can be made?



Submitted by Alan - IRA critic on Wed, 2024-07-17 12:29

The entire account balance could be withdrawn tax free because the client’s Roth is now qualified (age 59.5 and 5 year holding period completed).  The only situation is which the account would not be qualified yet would be if the 2018 contribution was an excess contribution.

Submitted by Madilyn Makayla on Fri, 2024-07-26 07:56

The client can take a tax-free distribution of up to $50,000. Since Roth IRA contributions and earnings are both eligible for tax-free withdrawal if the account has been open for at least five years and the client is over 59½, the entire account value can be withdrawn without tax consequences.

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