Distribution Overview

The rules for distributions from Roth IRAs are more complicated than we would like them to be. On this page we provide a brief overview of those rules so you can get the general idea of how they work.

Treat all Roth IRAs as one

In applying these rules, treat all Roth IRAs as one IRA. You can’t change the order of distributions by withdrawing from different Roth IRAs. For example, if you made one or more regular (non-conversion) contributions to a Roth IRA, the first dollars you withdraw from any Roth IRA will be treated as a distribution of your regular contribution — even if you take the withdrawal from a Roth IRA that received only conversion contributions.

Add up the amounts in all your Roth IRAs and determine the amounts in the relevant categories set forth below.

When can you withdraw?

You can withdraw money from a Roth IRA at any time. In some cases you will pay tax or penalty if you withdraw money too soon, but the tax law never prohibits you from taking money out of the IRA. If you really need to take the money out, you can — unless some other situation, such as an order of a divorce court, prevents you from doing so.

The terms withdrawal and distribution mean the same thing. When you take a withdrawal, you receive a distribution.

When must you withdraw?

If you own a regular IRA, you’re required to begin taking distributions at age 70½. This rule doesn’t apply to Roth IRAs. You’re never required to take distributions from your own Roth IRA. Beneficiaries are required to take distributions after the death of the original owner.

Order of distributions

The amounts you withdraw from a Roth IRA are considered to consist of the following amounts, in the following order. In each case, you move to the next category when the lifetime total of distributions from all your Roth IRAs exceed the preceding category.

• Regular contributions
• Taxable portion of first conversion
• Nontaxable portion of first conversion
• Each subsequent conversion, in order, with the taxable portion coming out first for each conversion
• Earnings (any increase in value occurring inside the Roth IRA)

Treatment of distributions

The tax treatment of the different categories of distributions may be summarized as follows:

Regular contributions

• Can be withdrawn at any time with no tax and no penalty.

Taxable portion of a conversion

Applies only when the lifetime total of withdrawals from all Roth IRAs exceeds the lifetime total of regular contributions to Roth IRAs plus the lifetime total of earlier conversions.

• If withdrawn before the first day of the fifth year after the year of the conversion: no tax, but will be subject to 10% early withdrawal penalty if you’re under age 59½ unless an exception applies.
• Beginning on the first day of the fifth year after the year of the conversion can be withdrawn at any time with no tax and no penalty.

Nontaxable portion of any conversion

Applies only after the taxable portion of the same conversion has been withdrawn.

• Can be withdrawn at any time with no tax and no penalty.

Earnings

Applies only after all amounts other than earnings have been withdrawn.

• If withdrawn before the first day of the fifth year after the year you first established a Roth IRA, taxable as ordinary income; also subject to the 10% early withdrawal penalty if you’re under age 59½ unless an exception applies.
• Beginning on the first day of the fifth year after the year you first established a Roth IRA, can be withdrawn with no tax and no penalty if you’re over age 59½ or otherwise meet the requirements for a qualified distribution (death, disability, first-time homeowner). Otherwise, withdrawals of earnings continue to be taxable as ordinary income and, unless an exception applies, subject to the 10% early withdrawal penalty.