Roth IRA
Someone asked me today if they could take money out of their Roth IRA. You can always take out the portion that you put in, even if you are under the age of 59 1/2. This is different from a regular IRA because with a regular IRA, you have to wait until age 59 1/2, even on the money that you put in.
For example:
Larry, who is 50 yrs old, puts $10,000 of his own money into his Roth over the course of 4 years. That $10,000 grows to $14,000 during those 4 years. What can he take out without penalty?
Answer: $10,000. That is the principal. The $4,000 that remains is the earnings which must stay in the Roth until age 59 1/2 or else he will have to pay a penalty.
posted by Bruingirl | 3:19 PM
|
0 comments
