Roth IRA Show Me The Money Home Care Path

The most important thing to ask an advisor when contributing to a Roth IRA (Individual Retirement Account) is when can I get my money. How can I get my money from a Roth IRA if I would need it. You want to understand the defined avenues for withdrawing money while avoiding excessive penalties and taxes.

Individual's who have made direct contributions (not a conversion from a traditonal IRA) can take money out tax free and penalty free if the money has been in the account for at least five years and you are fifty nine and a half years of age.

You can withdraw direct contributions at any time for any reason without taxes or penalties. If you contributed three thousand dollars to your Roth IRA over the years, you can withdraw three thousand dollars without taxes or consequesnces. So you can access your initial contribution. Taxes or penalties would apply only to the withdrawal of earnings beyond the three thousand dollars contributed.

The five year holding period for direct contributions actually starts the first day of the tax year for which you made your first deposit to the Roth IRA account. So if you made your first Roth IRA contribution on April 15, 2006 for the 2005 year, the five years would be January 2010. The money has not actually been in the account for five years and you have met the five year holding rule.

The Internal Revenue Service distributes (available online) IRS Publication 590 which explains the Roth IRA rules in detail. When you give someone your money, understand how you will get it back.