Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Roth IRA early withdrawl
Old 11-18-2019, 10:21 AM   #1
Recycles dryer sheets
 
Join Date: May 2013
Posts: 481
Roth IRA early withdrawl

I had a self-directed Roth IRA where I had rolled over the majority of funds to Vanguard a couple years ago. But there was still ~$20 left in the self-directed IRA.

The self-directed company sent me a check, but I neglected to do anything with it during the 60 day roll over window, so I imagine I'll have to pay a 10% penalty.

Can someone confirm that the penalty I'll pay for early withdrawal is just on the $20, i.e. a $2 fee.

Thanks.
__________________

__________________
Saved 8 figures by my mid-40's as a professional bubble-spotter. Beware...the Fed creates bubble after bubble after bubble.
RenoJay is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-18-2019, 10:33 AM   #2
Thinks s/he gets paid by the post
 
Join Date: Mar 2012
Posts: 1,149
Assuming you are under age 59 1/2, you'll pay a penalty and income tax only on the amount considered earnings/gains - nothing on original investment.

Wait for the tax form to show up from Vanguard.

Obviously not a big deal in the bigger scheme of things.

https://www.investopedia.com/ask/ans...withdrawal.asp
__________________

njhowie is offline   Reply With Quote
Old 11-18-2019, 02:28 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 7,602
The tax form will come from the old company, not Vanguard.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is offline   Reply With Quote
Old 11-18-2019, 03:15 PM   #4
Thinks s/he gets paid by the post
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 3,798
Withdrawals from an IRA are deemed by the IRS to be from contributions first, then conversions, then earnings.

So the $20 they sent you will be deemed to be the first $20 from your first Roth IRA contribution, however many years ago that was.

Assuming you've contributed $20 or more to your Roth IRA (which I have to imagine is true), then there will be no taxes and no penalty.

When you go to withdraw from your Roth later, if those withdrawals happen before 59.5, then you'll have to account for that $20. But otherwise you won't need to worry about it, as withdrawals after 59.5 are tax and penalty free (as long as some very basic prerequisites about having a Roth for more than 5 years are met).
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 11-18-2019, 03:44 PM   #5
Recycles dryer sheets
 
Join Date: May 2013
Posts: 481
Excellent. Thanks everyone!
__________________
Saved 8 figures by my mid-40's as a professional bubble-spotter. Beware...the Fed creates bubble after bubble after bubble.
RenoJay is offline   Reply With Quote
Old 11-18-2019, 07:22 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 8,706
Fairmark is a great resource for these kind of questions. Start at https://fairmark.com/retirement/roth...distributions/. You probably want to start with the overview and "tax free" sections, maybe others if tax free does not apply.
__________________

RunningBum is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
401K - Early Withdrawl with no Penalty eastnortheast FIRE and Money 10 01-15-2017 11:08 AM
Questions about limits surrounding ROTH IRA, SEP IRA and ROTH 401k RockSplat FIRE and Money 14 06-08-2009 01:30 PM
Roth IRA's: Avoiding withdrawl penalties Life_is_Good FIRE and Money 6 07-14-2007 10:10 AM
Must withdrawl 2006 IRA. I'm Self Employed MonarchDon FIRE and Money 7 03-13-2007 03:30 PM
72t Early withdrawl strategy for career transition Ron Huggins FIRE and Money 15 06-20-2004 03:35 AM

» Quick Links

 
All times are GMT -6. The time now is 05:00 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2019, vBulletin Solutions, Inc.
×