You can withdraw your contributions anytime without penalty, but earnings have strict rules
A Roth IRA is not locked until retirement. You can take out the money you put in (your contributions) at any time, for any reason, with no tax or penalty. The catch is the earnings — the growth on that money. Earnings are taxed and penalized if you withdraw them before age 59½, unless you meet one of a few narrow exceptions.
The IRS tracks contributions and earnings separately. When you withdraw, contributions come out first. Once contributions are exhausted, any further withdrawal is treated as earnings and subject to tax and the 10% early withdrawal penalty — unless an exception applies.
Key Takeaways
- You can withdraw contributions (the money you deposited) from a Roth IRA at any age without tax or penalty.
- Withdrawing earnings before age 59½ triggers a 10% penalty plus income tax, unless you meet an IRS exception like disability, first-time home purchase, or may have access to education expenses.
- The account must be open for at least five tax years before you can withdraw earnings tax-free at retirement age, even if you are over 59½.
- Your brokerage or bank will report the withdrawal to the IRS; you report it on Form 8606 when you file taxes.
Withdrawing contributions versus earnings
The IRS lets you pull out contributions without paperwork or penalty because that money was already taxed when you earned it. Your brokerage will know how much you have contributed over the years — this figure is on your year-end statements and in your account records.
Earnings are the gains: interest, dividends, and capital appreciation. If you contributed $5,000 and the account grew to $7,000, the $2,000 gain is earnings. Withdrawing that $2,000 before age 59½ costs you 10% ($200) in penalty plus income tax at your ordinary rate, unless an exception covers you.
When you request a withdrawal, the IRS assumes you take contributions first. If you withdraw $3,000 and you have $5,000 in contributions, all $3,000 is treated as a contribution withdrawal and is tax-free. If you withdraw $7,000 against $5,000 in contributions, the first $5,000 is contribution and the remaining $2,000 is earnings.
Exceptions that let you withdraw earnings early
The IRS allows early withdrawal of earnings without the 10% penalty in these situations: disability, medical expenses over 7.5% of adjusted gross income, health insurance premiums while unemployed, first-time home purchase (up to $10,000 lifetime), may have access to education expenses, and substantially equal periodic payments under IRS Rule 72(t).
Even with an exception, earnings are still subject to income tax at your ordinary rate. You avoid the penalty, not the tax. For example, if you withdraw $2,000 in earnings for a first-time home purchase and you are in the 22% tax bracket, you owe $440 in tax but no $200 penalty.
The disability and medical expense exceptions require documentation. For disability, you must have a physician's statement that you cannot work. For medical expenses, you must itemize deductions and show the expenses exceed the threshold. First-time home purchase is simpler — you need only show you have not owned a home in the past two years.
The five-year rule for earnings
Even if you are over 59½, you cannot withdraw earnings tax-free unless the Roth IRA has been open for at least five tax years. This is separate from the age rule. If you open a Roth IRA at age 58 and turn 59½ two years later, you still cannot withdraw earnings tax-free until the account is five years old.
The five-year clock starts on January 1 of the year you open the account, not the day you fund it. If you open and fund a Roth IRA on December 15, 2024, the five-year period ends on January 1, 2029. You can withdraw earnings tax-free starting that date, even though the calendar shows less than five years have passed.
This rule applies to each Roth IRA separately if you have more than one. If you have two Roth IRAs opened in different years, each has its own five-year clock. However, if you convert a traditional IRA to a Roth, the five-year rule applies to the conversion amount, and the clock starts the year of conversion.
How to request a withdrawal
Contact your brokerage or bank — the institution holding the Roth IRA — and ask for a withdrawal form. Most firms offer online withdrawal requests through their website or app. You will specify the amount and the destination (a check, transfer to another bank account, or wire).
The institution will process the request within a few business days. They will send you a Form 1099-R, which reports the withdrawal to the IRS and to you. Keep this form for your tax return.
If you are under 59½ and withdrawing earnings, you will need to report the withdrawal on Form 8606 when you file your tax return. This form tells the IRS whether the withdrawal qualifies for an exception. If it does not, you owe the 10% penalty in addition to income tax.
Withdrawals and your tax return
Contributions are not reported as income. The Form 1099-R will show the total amount withdrawn, but you use Form 8606 to separate contributions from earnings. Only earnings are taxable.
If you withdraw earnings and do not have an exception, you report the earnings amount as income on your tax return and add the 10% penalty. Your tax software will walk you through this if you enter the Form 1099-R correctly.
If you have an exception, you still report the earnings as income, but you do not owe the penalty. Some exceptions (like education expenses) may also may have access to you for a tax credit, which could offset the tax owed on the earnings.
What happens if you need money before retirement
If you need cash and have contributions available, withdraw contributions. This is the simplest and cheapest route — no tax, no penalty, no forms beyond the withdrawal request itself.
If you need earnings and do not have an exception, the cost is steep: 10% penalty plus income tax. For a $5,000 earnings withdrawal in the 22% bracket, you lose $1,100 to tax and penalty, leaving $3,900. Consider whether a personal loan, credit line, or other borrowing is cheaper.
If you have an exception, the cost is only income tax, not the penalty. Education expenses and first-time home purchase are the most common exceptions people use. Disability and medical expenses are narrower but available if they apply to you.
Frequently Asked Questions
Can I withdraw contributions and put them back later?
You can withdraw contributions anytime, but you cannot put them back into the same Roth IRA in the same year. You can make a new contribution in the following year up to the annual limit, but the withdrawn amount does not roll over. If you think you might need the money back, a Roth IRA may not be the right account for it.
What if I have multiple Roth IRAs?
The IRS treats all your Roth IRAs as one account for the purpose of the contribution-versus-earnings calculation. If you have $10,000 in contributions across three accounts and withdraw $5,000 from one account, the IRS counts that $5,000 against your total $10,000 in contributions. You cannot cherry-pick which account to withdraw from to avoid earnings.
Do I have to report a contribution withdrawal on my taxes?
No. Contributions are not taxable income, so you do not report them. You will receive a Form 1099-R, but the amount shown is the total withdrawal. You use Form 8606 to show the IRS that the withdrawal was contributions only, which are not taxable.
What if I withdraw earnings by mistake and do not have an exception?
You owe income tax plus the 10% penalty on the earnings amount. You report this on your tax return when you file. If the penalty seems wrong, you can request a waiver from the IRS, but waivers are rare and require a strong reason — such as a financial advisor telling you it was allowed when it was not.
Can I use a Roth IRA withdrawal for a down payment on a house?
Yes, if you are a first-time home buyer. You can withdraw up to $10,000 in earnings without the 10% penalty (contributions are always penalty-free). You still owe income tax on the earnings. The $10,000 limit is lifetime, not per year, so plan accordingly if you think you might buy again.