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ROTH Withdrawal - where to find "plain explanation"?
06-15-2011, 12:29 PM
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#1
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Recycles dryer sheets
Join Date: Sep 2010
Posts: 119
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ROTH Withdrawal - where to find "plain explanation"?
Hey everyone,
Is there any place to go and get "plain English" explanations about how to handle withdrawals from a ROTH?
Is it just a simple situation that you can withdraw ALL contents of the account if you meet the age requirement?
And are there complications if the person doing the withdrawal isn't the actual owner of the ROTH account but they do have a Financial POA?
Thanks for any input.
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06-15-2011, 12:37 PM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,566
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The best starting place would be the custodian (bank or brokerage) where the account is held. There are things like 5 year holding periods and you'll need to probably use the bank's own POA form (or wait for a week or more while their legal dept reviews yours) and perhaps other considerations (like are investments liquid, etc).
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06-15-2011, 02:10 PM
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#3
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Thinks s/he gets paid by the post
Join Date: Jun 2005
Posts: 4,391
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Quote:
Originally Posted by frances
Hey everyone,
Is it just a simple situation that you can withdraw ALL contents of the account if you meet the age requirement?
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Age requirement and 5 years of investment is the rule . Note that penalties (if any) are only levied on investment gains - not on the principal.
For your info, here are 3 plain english sitres that explain withdrawals...
Fool.com: All About IRAs - The Roth IRA Withdrawals
Withdrawal Rules: Roth IRAs
Roth IRA Withdrawal Rules
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06-15-2011, 07:54 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jan 2006
Posts: 4,172
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see this wonderful table by KAWill from the fairmark.com site :
(after every yes or no, imagine a semicolon that is missing)
The Table asks if you are under/over age 59.5;
If you are under age 59.5, there is a 5 yr. clock for each conversion
that must be met for that withdrawal to be tax & penalty free;
Re: Roth IRA Rules - Table Approach
Posted by: KAWill (IP Logged)
Date: October 14, 2010 11:57PM
Roth IRA Distribution Table
UNDER AGE 59.5
FIVE YEAR CONVERSION HOLDING PERIOD NOT MET
Contributions: Tax-No Penalty-No
Conversions: Tax-No Penalty-Yes (Taxable Portion)
Conversions: Tax-No Penalty-No (Nontaxable Portion)
Earnings: Tax-Yes Penalty-Yes
UNDER AGE 59.5
FIVE YEAR CONVERSION HOLDING PERIOD MET
Contributions: Tax-No Penalty-No
Conversions: Tax-No Penalty-No (Taxable Portion)
Conversions: Tax-No Penalty-No (Nontaxable Portion)
Earnings: Tax-Yes Penalty-Yes
OVER AGE 59.5
LESS THAN FIVE YEARS SINCE OPENING FIRST ROTH IRA
Contributions: Tax-No Penalty-No
Conversions: Tax-No Penalty-No (Taxable Portion)
Conversions: Tax-No Penalty-No (Nontaxable Portion)
Earnings: Tax-Yes Penalty-No
OVER AGE 59.5
FIVE YEARS OR MORE SINCE OPENING FIRST ROTH IRA
All Distributions Are Qualified
No Taxes
No Penalties
Note: The table is not applicable to timely distributions of excess contributions or return of regular contributions. Also note that contributions (but not conversions)
may be withdrawn at any time without tax or penalty. Withdrawals are considered to be contributions first, then conversions , then earnings.
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06-15-2011, 10:36 PM
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#5
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Thinks s/he gets paid by the post
Join Date: Feb 2003
Posts: 2,395
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