1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    A Roth IRA is subject to the Internal Revenue Code. The code stipulates that you can withdraw money from your Roth IRA whenever you want. If the account has been in force for over five years the distribution will not be considered ordinary income, however if you are younger than 59.5 you will be subject to a 10% penalty tax. Once your are more than 59.5 and have held the contract for more than 5 years you can withdraw money to your heart’s content without fear of income tax.
    Answered on January 21, 2015
  2. 21750 POINTS
    Jim Winkler
    CEO/Owner, Winkler Financial Group, Houston, Texas
    That is a great question! With any retirement vehicle, the design is for the money to remain in the account for as long as possible, to provide the best chance for supporting your retirement. That said, there are times when cash is needed for emergencies. That's where having a Roth comes in handy. The IRS requires a penalty if you're taking your withdrawal before the age of 59 1/2, unless what you take out is less than the amount you've contributed to it. For example: You've paid into your Roth $55,000 over the years. It has a value of well over that amount. If your withdrawal is say $50,000, you would most likely not pay the 10% penalty, or taxes, especially if the money is to be used for a home, school expenses, or catastrophic medical expenses. If you were to withdraw over that $55,000 amount, you may have taxes and penalties to worry about, especially if the withdrawal is not for the reasons I mentioned.
    Other than the 5 year, 59 1/2 rules, there really is no forced time to have to start taking withdrawals, which makes this an exceptionally good retirement vehicle - wait on this one until the others have been run low. I hope that helps, thanks for asking!
    Answered on January 26, 2015
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