Thinking about withdrawing your Roth IRA? Maybe it’s for a new home, unexpected expenses, or you’re just curious about accessing your retirement savings. The good news is, yes, you can withdraw money from your Roth IRA—but there are some important rules and timing to consider. Let’s break it down so you can understand when and how to make the most of your Roth IRA without getting hit with penalties or taxes.
❓ Can I Withdraw or Use My Roth IRA as an Emergency Fund?
A: Yes, a qualified distribution that occurs at least 5 years after the year you made the ROTH contribution, you an take money out for either:
- 1️⃣ You’re over the age of 59 ½,
- 2️⃣ Distribution is related to your disability (defined in I.R.C. § 72)
- 3️⃣ Money is paid to a beneficiary or estate on or after your death, or
- 4️⃣ Taken for a qualified special purpose, including for a first-time homebuyer expense up to $10,000.
You can qualify as a first-time homebuyer even if you’ve owned a home in the past. As far as the Internal Revenue Service (IRS) is concerned, you’re a first-time homebuyer if, “you had no present interest in a main home during the 2-year period ending on the date of acquisition of the home which the distribution is being used to buy, build, or rebuild. If you are married, your spouse also must meet this no-ownership requirement.”
Ready to make smart moves with your retirement savings?
Before you make any Roth IRA withdrawals, let’s ensure you’re maximizing every tax benefit. Schedule a chat with us today, and we’ll guide you through your options. Your future self will thank you!