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demtenjeep

(31,997 posts)
2. I have a roth IRA and have had it for about 15 years
Wed Jun 11, 2014, 01:49 PM
Jun 2014

I probably won't live to the age to officially retire and use it and I could use the money now so I want to break it

rurallib

(62,346 posts)
4. I am no financial guy. I suggest you call the company you have the Roth with
Wed Jun 11, 2014, 02:01 PM
Jun 2014

I am fairly sure they would have no cost just to talk to them.
That being said, my recollection is that if you cash in before 59.5 there is a penalty plus you have to pay taxes on the interest. Whatever you decide you will probably need the services of those who sold you the IRA, so call them and talk to them.

From Wikipedia:
Distributions[edit]
Returns of your regular contributions from your Roth IRA(s) are always withdrawn tax and penalty free.[1] Eligible (tax and penalty free) distributions of earnings must fulfill two requirements. First, the seasoning period of five years must have elapsed, and secondly a justification must exist such as retirement or disability. The simplest justification is reaching 59.5 years of age, at which point qualified withdrawals may be made in any amount on any schedule. Becoming disabled or being a "first time" home buyer can provide justification for limited qualified withdrawals. Finally, although one can take distributions from a Roth IRA under the substantially equal periodic payments (SEPP) rule without paying a 10% penalty,[11] any interest[vague] earned in the IRA will be subject to tax[12]—a substantial penalty which forfeits the primary tax benefits of the Roth IRA.--

M0rpheus

(885 posts)
3. You can withdraw before 59.5 but there is a penalty.
Wed Jun 11, 2014, 01:54 PM
Jun 2014
http://www.fool.com/money/allaboutiras/allaboutiras07.htm

Just call the administrator and tell them you want to withdraw. It shouldn't be much harder than that.

myrna minx

(22,772 posts)
5. You may remove your contributions without penalty, but if you withdraw your earnings
Wed Jun 11, 2014, 02:09 PM
Jun 2014

(your profit made on your contributions) and you're under 59.5 years old, you will receive a penalty on the withdrawal of your earnings.

https://investor.vanguard.com/what-we-offer/iras/traditional-iras-and-roth-iras

Q) What's the penalty if I take a withdrawal before I reach age 59½?

A) There are no penalties on withdrawals of your contributions.

There's a 10% federal penalty tax on withdrawals of earnings unless an exception applies.**

*The 5-year holding period for Roth IRAs starts on the earlier of: (1) the date you first contributed directly to the IRA, (2) the date you rolled over a Roth 401(k) or Roth 403(b) to the Roth IRA, or (3) the date you converted a traditional IRA to the Roth IRA. If you're under age 59½ and you have one Roth IRA that holds proceeds from multiple conversions, you're required to keep track of the 5-year holding period for each conversion separately.

**Distributions received before you're age 59½ may not be subject to the 10% federal penalty tax if the distribution is due to your disability or death; is distributed by a reservist who was ordered or called to active duty after September 11, 2001, for more than 179 days; or is for a first-time home purchase (lifetime maximum: $10,000), postsecondary education expenses, substantially equal periodic payments taken under IRS guidelines, certain unreimbursed medical expenses, an IRS levy on the IRA, or health insurance premiums (after you've received at least 12 consecutive weeks of unemployment compensation).

You may wish to consult a tax advisor about your situation.

DrDan

(20,411 posts)
6. you can withdraw contributions any time without tax or penalty
Wed Jun 11, 2014, 02:11 PM
Jun 2014

earnings, however, are different depending on age (59 or older) and how long you have owned the ROTH (5 years or more)

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