Well, I hope you don't have to do it. But if you clicked on this video, then chances are you're wondering, "Hey, what's it going to cost me to take some money out of my Roth IRA a bit early?" Let's talk about it now. Lucky for you, the Roth IRA is more flexible than most of the other types of IRAs, and a lot of times you just have to pay a little penalty and you'll be on your way. However, there are times you could take money out of the Roth IRA penalty-free because remember that you're contributing to a Roth IRA with money you've already paid taxes on. See, the IRS' main concern is that you pay money on any earnings that you have, any income that you have. Well, remember with a Roth IRA, you have a job, you get paid, you pay taxes, and everything left over is what you can contribute to a Roth IRA. So essentially, you already pay taxes on the money that you're contributing to the Roth IRA. Now, because of that, they generally don't care if you contribute some money and you change your mind, you decide you want to take it back out, as long as you're taking out the money that you owe, that you've contributed, right? Then you can do that usually with no penalty and no taxes. However, anything over and above whatever you've contributed, well, that's earnings or growth, and any type of earnings, the government of course wants their taxes on. Now, as long as you follow the rules, you can generally take out any of your contributions tax-free and penalty-free. There are a few rules, let's talk about those here. Now, the first rule is called the five-year rule. To take out money...
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Simple ira withdrawal rules Form: What You Should Know
Form 1099-R-1099R — Distribution for Distributions Over 600 from an Individual Retirement Plan—Vanguard 1099-R, 1099-R-1099R (Cancellation) (Form 1039), 1099-R-1099R (V), 1099-R-1099R-EV (Form 1099-R-V) Form 1099 or Form 1098-G, 1099-B, 1099-B-1099 (V). Also called Form 982-8, Form 972-EZ-EZ, or 972-EZ-EZ-EZ (Cancellation) (Form 1099-R, 1099-R-1099R (C). Also called Form 982-8, Form 972-EZ (C), or (C), also called Form 990-EZ (Cancellation) (Form 1099-R, 1099-R-E) (Form 990, 990-E) (C).
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