Roth IRA withdrawals are tax-free in retirement, but only if you follow two rules: you must be 59½ or older, and the account must have been open for at least five years

The core appeal of a Roth IRA is that you pay taxes on the money going in, then never pay taxes on it again—including the growth. Once you reach 59½ and your account has been open for five tax years, you can withdraw your contributions and earnings without owing federal income tax. This is different from a traditional IRA, where withdrawals are taxed as ordinary income.

The five-year rule applies to the account itself, not to each contribution. If you opened your first Roth IRA in 2020, all your Roth accounts are considered to have satisfied the five-year requirement starting in 2025, even if you've added money to a different Roth IRA since then.

Key Takeaways

  • Withdrawals from a Roth IRA after age 59½ are tax-free if the account has been open for at least five tax years.
  • If you withdraw before 59½, you can take out your contributions tax-free anytime, but earnings are taxed as income and may face a 10% penalty.
  • Conversions from a traditional IRA to a Roth create a separate five-year rule for the converted amount, not the original account.
  • The five-year clock resets if you inherit a Roth IRA from someone other than a spouse, and you may owe taxes on inherited earnings.

Withdrawals before age 59½: contributions versus earnings

You can withdraw your own contributions to a Roth IRA at any time, tax-free and penalty-free. The IRS treats contributions as your own money that you've already paid tax on. If you put in $6,500 a year for three years, you can pull out that $19,500 whenever you need it without consequence.

Earnings—the investment gains your money has made—are a different story. If you withdraw earnings before 59½, you owe federal income tax on them at your ordinary tax rate, plus a 10% early withdrawal penalty. There are a few exceptions to the penalty (first-time home purchase up to $10,000 lifetime, may have access to education expenses, disability, medical insurance if you're unemployed), but the income tax still applies unless you meet the age and five-year requirements.

The IRS uses a pro-rata rule if you have both a Roth and a traditional IRA. If you withdraw from a Roth before 59½, the IRS treats the withdrawal as coming proportionally from contributions and earnings across all your IRAs combined, not just from the Roth. This can create unexpected tax bills if you have a large traditional IRA balance.

The five-year rule for Roth conversions

If you convert money from a traditional IRA or 401(k) to a Roth, that converted amount has its own five-year holding period. You can withdraw the converted amount without penalty after five years, even if you're under 59½. However, the earnings on that converted money still cannot be withdrawn penalty-free until you reach 59½.

This matters because conversions are often done in chunks over multiple years. A conversion you made in 2021 satisfies its five-year rule in 2026, but a conversion in 2024 doesn't satisfy it until 2029. You need to track each conversion separately to know when you can access each piece without penalty.

The converted amount itself is not taxed again—you already paid tax on it when you converted. But if you withdraw it before the five-year window closes, the IRS treats it as an early withdrawal of earnings and applies the 10% penalty.

Inherited Roth IRAs and the five-year rule

If you inherit a Roth IRA from someone other than a spouse, you cannot treat it as your own account. You must withdraw the entire balance by December 31 of the tenth year after the original owner's death (under current rules). During that time, you can withdraw contributions tax-free, but earnings are taxable income in the year you withdraw them.

If you inherit a Roth from your spouse, you have the option to treat it as your own. If you do, the five-year rule is based on when your spouse opened the account, not when you inherited it. If you treat it as an inherited account instead, the ten-year rule applies.

State income tax on Roth withdrawals

Federal tax is only part of the picture. Most states do not tax Roth IRA withdrawals, but a few do. Pennsylvania taxes IRA withdrawals (including Roth) as income. New Jersey taxes withdrawals from IRAs opened after 1992. A handful of other states have specific rules tied to age or income level.

Check your state's tax code or contact your state tax authority to confirm whether your Roth withdrawals will be taxed at the state level. This is especially important if you're planning to retire in a state different from where you currently live.

Required minimum distributions and Roth IRAs

Unlike traditional IRAs, Roth IRAs do not require you to take withdrawals at any age during your lifetime. You can let the money sit and grow tax-free indefinitely. This is one of the biggest tax advantages of a Roth, especially if you don't need the money in retirement.

If you inherit a Roth IRA, the rules change. Beneficiaries must withdraw the account within ten years (or follow other payout schedules depending on their relationship to the original owner). The withdrawals themselves are not taxed, but any earnings withdrawn are taxable income in that year.

Roth conversions and pro-rata taxation

When you convert a traditional IRA to a Roth, the IRS looks at all your traditional IRAs, SEP IRAs, and SIMPLE IRAs combined to calculate how much of the conversion is taxable. If you have a $100,000 traditional IRA and convert $50,000 to a Roth, the IRS doesn't let you convert just the after-tax contributions. Instead, it calculates what percentage of your total IRA balance is pre-tax versus after-tax, and applies that percentage to the conversion.

This pro-rata rule catches many people off guard. If you have a large pre-tax IRA balance and a small amount of after-tax money, converting to a Roth triggers a large tax bill. Some people use a "backdoor Roth" strategy to work around this, but it requires careful timing and record-keeping.

Frequently Asked Questions

Do I owe taxes on Roth IRA growth?

No. Once the money is in the Roth, all growth is tax-free forever, as long as you follow the withdrawal rules. You never pay tax on the earnings, even when you withdraw them in retirement, provided you're 59½ and the account has been open five years.

What happens if I withdraw from my Roth before five years?

You can withdraw your contributions anytime tax-free. Earnings withdrawn before age 59½ are taxed as ordinary income and usually face a 10% penalty, unless you may have access to for an exception like first-time home purchase or disability.

Can I withdraw a Roth conversion before five years?

The converted amount itself can be withdrawn after five years without penalty, even before 59½. But earnings on that conversion cannot be withdrawn penalty-free until you reach 59½. The five-year clock starts the year of the conversion.

Do I have to pay taxes on an inherited Roth IRA?

Contributions are tax-free. Earnings are taxable income when you withdraw them, regardless of your age. If you inherit from a spouse and treat it as your own, the five-year rule is based on when your spouse opened the account.

Will my state tax my Roth withdrawals?

Most states do not tax Roth withdrawals. Pennsylvania and New Jersey tax them under certain conditions. Check your state's rules or contact your state tax authority to confirm your situation.