Feb 4

Hello. I have read IRA distribution rules over and over and understand the many examples clearly, but none applies to MY situation.

I have had a Roth IRA since 1999, when I converted to it. Since then I have made the maximum after tax contributions allowable (into an aggressive stock fund), and my balance is now around $90K. I am considering withdrawing all of my contributions because I fear being wiped out by the economy, and I cannot sit back and watch that happen. I cannot move the money to a “safe” harbor because all the safe funds (such as money market) at Vanguard are closed to new investors. What would the penalty be if I pull my contributions, if there is one? Must I wait five years from the year of each contribution to withdraw penalty free (in other words, can I withdraw only my contributions through 2004) or am I free from withdrawal restrictions on my entire after tax contributions? Please clarify.


one comment so far...

  • admin Said on February 4th, 2010 at 5:15 pm:

    Unles you’re 59,5 you cannot withdraw your Roth Ira contributions, sorry.There are some exceptions:
    1. Your disability
    2. Your death
    3. If distributions are used to pay for unreimbursed medical expenses that exceed 7 1/2% of adjusted gross income (AGI).
    4. If they are used to pay for first-time home purchase(limited to $10.000 lifetime)
    5. If distributions are used to pay medical insurance premiums after you received unemployment compensation for more than 12 weeks.
    6.If you used your distributions to pay for your own or family members higher education.
    7.If you use them to pay back taxes because of an IRS levy placed against the IRA.
    8.If distributions are a series of “substantially equal periodic payments” made over the life expectancy of the IRA owner.

leave a reply

Powered by Yahoo! Answers

Page Ranking Tool