Title | : | Understanding Roth IRA Withdrawal Rules |
Lasting | : | 11.27 |
Date of publication | : | |
Views | : | 45 rb |
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I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them We can get by, but can't seem to get ahead My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for Comment from : William Ethan |
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Awesome summary, thank you Trying to figure out if I should do taxable conversions or not Very confusing Comment from : butopiatoo |
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Comment from : Phyllis Richards |
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Informative video I have a question:brbrGiven/scenario:br- I'm under 595 years oldbr- I left my current employer who had a Roth 403b I contributed post-tax funds of $20K It grew to $35K (so $15K growth)br- I rolled the Roth 403b over to a newly opened Roth IRA so I can track it separately (however, I've had another Roth IRA from more than 10 years so I'm assuming that should negate the 5-year waiting period)br- I also have an older Roth IRA which has $40K ($30K contributions and $10K growth)brbrQuestion:br- Can I take out my contributions in the new Roth IRA of $20K tax-free and penalty-free? br- I think you stated in the comments below, the IRS looks at all your Roth IRAs as one, so you can't really pick and choose since there is an IRS order of distributions regardless of the number of open Roth IRA accounts With the information in the Given section and from what I interpret from your video, does that mean I can take out $50K tax-free/penalty-free since it was composed of contributions post-tax ($20K from my contributions in newly opened Roth IRA and $30K from my older Roth IRA)? brbrThanks for any input It's a scenario I've been wondering for awhile Comment from : Michael Carpio |
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So I started is my Roth conversion at 60 years old So does this mean I have no 5 year clock? Comment from : steve s |
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When it comes to contribution withdrawal rules, is the Roth IRA portfolio treated as one unit or is it divided by the different investments inside the Roth? For example, consider that I opened a Roth IRA and invest $10 in Investment A and $10 in Investment B If Investment A losses 50 (now worth $5) and Investment B gains 50 (now worth $15) my entire portfolio is still at $20 But if I were to withdraw my initial contribution of $20 at this point, would the $5 gain in Investment B now be taxable even though I did not withdraw more than my initial contribution amount? Any help would be appreciated! Comment from : Hudson Sherrod |
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This is the professional advice we need! So clear and effective! Thank you very much! Comment from : Bitter Sweet Smith |
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ROTH IRA - TRADITIONAL IRAsbrbrReflecting about my life and every time I remember that I'm 36 years old and my wife is 32 years with a combined net worth of $12M gives me great joybrbrNo more 9-5, kids now a bit grown in school, no debts, it still seems like I'm a dream So many years ago, it was tough and hard to manage the family with a lot of debts Had to borrow from my friends and was insulted severely due to hardships But now the grass is much greener on this sidebrbrI believe we achieved this through proper regular saving and key passive income methods Comment from : Van Drex |
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Hi Andy how are you brHope you’re doing wellbrbr2018- open Roth IRA and converted from traditional Ira br2019- converted another traditional Ira br2023- withdraw large amount from Roth irabrI’m 74 years old brWill I be paying tax on Gain ?brLooking forward your answer brThank you sooo much Comment from : Green |
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how do you report withdrawing my original contributions? the tax programs are saying I need to pay taxes on them? Comment from : Robert Rocha |
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So I am 30 years old my grandmother has been putting money into this an account my whole life I am up to about 60,000 I am on my own with a newborn and I have a full-time job my wife has a full job but we still live in a horrid horrid apartment where tweakers just shoot up on the front steps it just happened this morning I need to get out but I can't save enough money to make the first last and the deposit to get into a new place I really need to be able to take this money out and I don't know how exactly to go about doing that should I just get with a financial advisor or is there an easier way to withdraw this funds in a desperate state right now times are tough any info would be appreciated aside from Comment from : Dylan Sperstad |
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Great overview Are there exceptions for qualified distributions from an account with conversions that have not yet matured (ie they have not yet met the 5-year waiting period)? For example, if I'm buying a home for the first time and need to withdraw funds, will I be required to withdraw the converted funds first and incur a 10 penalty for early withdrawal, or can I "skip" past withdrawing from the converted funds and take the $10K in qualified distributions from my earnings instead (penalty free)? Comment from : aerovespr |
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Best video ever Comment from : Ramon |
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If I have contributed $16000 over 4 years but my current balance is $15000 due to losses in the market can I withdraw that whole amount without being penalized since my contributions were greater than that? Comment from : Jasmine Fox |
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What if I lose not gain some of my original contributions can I take my remaining contributions? Comment from : Nxet |
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What if you rollover a Roth 401k that has been opened for 5 years into a Roth ira that has been opened for 10 years? Has the 5 year rule been satisfied by the Roth ira that’s been open for 10 years? Comment from : D Smith |
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What if the roth invested in stockmarket and bond and i want to take out(sell) money whats the rule? Comment from : shachar cohen |
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QUESTION:brI opened a Roth IRA with Fidelity in 2020, contributed $5,000 and gained $1,000 Will I be penalised if I wanted to take out the $5,000 that I contributed because it has beenless than 5 years? Comment from : Exauce Mayunga |
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How do I get access to the ira account do I need to call someone or go two a website need help take out money Comment from : John Hernandez |
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Thanks so much for this infobrbrI recently started looking at my roth ira account info and I came across the Federal income Tax Withholding option brbrIs there any reason why it's set, by default, at 10 federal tax withholding? Assuming I do make a qualified distribution that's both tax and penalty free once I retire, do I still need to withhold 10 for federal income tax? Or should I change that?brbrThanks in advance for your help Comment from : Guilty Red |
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I would appreciate more details on the earnings that would be taxed🤔 Comment from : Laura Castillo |
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man retirement accounts are so incredibly useful in ways that +95 of Americans have no idea about I used to make about 150k/yr and am going back to medical school right nowbr1 I was able to avoid (not evade lol) paying a bunch of income tax by funding the crap out of my IRA, and now I take out the standard deduction + education credit, every year from my IRA, tax and penalty free, coz my qualified education expenses are like 70k per year lolbr2 I was able to pile about 3 years worth of contributions into my Roth IRA (20k$), which effectively made the money disappear from the pile of cash the school/gov can see with the FASFA, which reduced my expected finical contribution My school only looks at the first year's EFC and determines fin aid stuff for the next 4 years so I could just take the money back out when needed as it was always after taxbr3 Because I am trying to avoid taxes, I can continue to day trade in my Roth IRA, and not have to claim any gains at the end of the year instead I can basically pick and choose which year over the next 10 years which I will be making close to nothing, I want to pay the tax bill Now obviously brokerage accts are a lot better coz of long term capital gains if I ever make a bunch of money but ide rather spread it out over 10 years as I see fit, than to play the brokerage game I also can control my net income and make sure I am eligible for state funded health insurance or other financial assistance like food stamps/internet I think I am morally opposed to this thoughbrbrWho ever said they have to be used for retirement investing? lol I feel like theses are all secret super powers for "retirement" accounts that no one told me about and I had to scheme and read the gov tax website to figure out Most recently I took out an extra 20k in student loans @ 55 and am going to buy I bonds with them Student loan interest is still frozen and inflation is effectively erasing 30k of my 280k debt every year right now lol Might as well take out loans before the MD plus loan rates go up to 8-9 in a couple yearsbrthanks for the very thorough video Comment from : G Money |
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My hubby and I are both over 65 and retired If we roll over/convert a traditional IRA into a self-directed ROTH IRA (iTrust Capital?) we understand that we will pay income tax on the converted amount Will our adult children be able to inherit our new ROTH IRA tax free? Will they have to take full distribution within 10 years of our death because of the Secure Act? Comment from : Maureen King |
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If you take out $20,000 of contributions can you later start to contribute back into the roth ira? Comment from : Drip |
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Hi,brI am reinvesting my Div's now in my ROTH and when it matures, I wish to have them placed in my Money market so I can transfer them to another Institution Can I do this or do I have to sell stock to get a Distribution?? Thanks Comment from : R W |
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By far the best video on this topic, clearly explained, and help to "demystify" the topic Keep up the good work! Comment from : Ahsan Karim |
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Thanks Andy for this very informative video! I am currently leveraging the down market and doing more Roth Conversions, and this video answers my questions on the taxability of my withdrawals in the future Comment from : Letty P Solis |
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I’m 19 and just inherited a Roth ira but I would like to buy a car how would I withdraw from my fidelity Roth ira rda account Comment from : Ian Stanley |
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If I contribute 5k last year but have no gains but want to withdraw my contributions can I take out the money at loss assuming 5k is now 4K can I withdraw the 4k Comment from : NR V |
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AndyIf I open my first Roth IRA at retirement at age 72 and do taxable conversions from my 401K am I subjected to the 5 year rule if I wish to withdraw taxable conversion money and / or gains a year or two later? Thanks Comment from : Lou9chess |
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excellent! The 1099-r box 7 code "j" is a curious one it seems to be an elastic code for the regular contribution, taxable and nontaxable contribution withdrawal when you have satisfied the cumulative 5 year wait period I suppose, provided you have all of the statements to confirm the withdrawals, an audit should be straight forward and a waste of the IRS' time to even begin one! 'Mercia! brbrthe principle savings one has put away for 5 years can be liquidated quickly for an emergency action and that interest could still compound into a tidy sum until the big 6-0 Comment from : Eric Murphy |
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I want to withdrawal contributions from my Roth IRA account I only contribute about $1200 per year but I need to withdraw at least $7000 Am I only allowed to withdraw the contribution amount within my current year or can I withdrawal contributions from previous years without being penalized or taxed? This is a small Roth Ira account that I’ve had for years and I withdraw $9000 from the account several years ago but returned the funds back into the Roth IRA account before 60 days I can’t remember if it was a contribution withdrawal only or was it some of the earnings but I did not use the money and returned it back to the account I have a couple of credit cards I would like to use this money for to pay off Comment from : Eric Oliver |
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Great brAll the other videos were made by windbags or salespeople Thx Comment from : FlaschDJ |
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THANKS FOR EXPLAINETION, I have question, if I rollover my 401K in to ROTH IRA till I have 5 years hold Comment from : Jose Roa |
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Thank you for your video I was wondering if you can give me a "pointer" My financial advisor opened a Roth for me , which I have contributed( max Of 7, 000) to for the last two years The problem is , when I went to add another 7 to it this year he had a rude awakening He opened that Roth with my unearned income( settlement from an injury ) He has no clue how to get that money out without me being taxed! Any pointers you can offer would be greatly appreciated, PLEASE Thank you Comment from : Melinda Hernandez |
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I'm 56 years old and opened a roth IRA in 2021 ( not a rollover ) I contributed a total of 695000 for a few months but made no gains I withdrew all of it in the same year Did i mess up? Comment from : GEO5252 |
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I contributed 4500 in my charles schwab personal roth ira It grew to 5000 I recently sold my 4500$ worth of shares of the invest I chose in mg roth and now the order status notes that "early with penalty" What did I do wrong? Comment from : ChicanoPridex08 |
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Thank you for the great video! Quick question on gains: when you talk about "gains", do they also include gains from taxable conversion and nontaxable conversions? Comment from : Patrick Pei |
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Great video very informative, I just have a question I’m 64 now and stop working since last year but not collecting social security yet Can I still make Roth contribution to my account? If I can I don’t need to hold it for 5 years anymore if say I started getting the distribution in three years right? Thank you andy your channel had helped a lot of people God bless! Comment from : Lydia Lee |
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Another great video! Comment from : 6 Tool Baseball |
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Hello Thanks for the great video QQ if i am under 59 1/2 and i am meeting 5 year rule and i take earning money out for qualified education I know i wont be paying penalty but what about tax on earnings? Comment from : Adnan Basir |
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I have a Roth IRA and its like 10 years old I am only 37 years old 75 of my money in there is from Capital gains I would like to pull some of it for starting a new business Is that possible? Comment from : Punny Money |
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Straight to the point Love it Comment from : Andrew Le |
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if i am only 49 and if i were to pull out all my 'contributions' from my roth just to put that money into a regular 'brokerage account' that i know i will have to pay taxes on will it be better or 'a wash' or worse than just taking money out early directly from the (10+ y/o) roth? Comment from : THECURELOST13 |
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what if i am not 60y/o yet and i want to withdraw a large amount from my roth (that is 10+ years old)? what is the penalty and tax hit? lets say for $1,000,000 and on 100 gains? i was hoping you'd cover the penalty part of this in the video but am grateful you did the 'positive' side of it so well THANKS! Comment from : THECURELOST13 |
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This advice is not accurate Does not reflect US Tax Code and US Law Comment from : MadWorldUSA |
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I had to withdraw from my Roth IRA last summer because of Covid wrecking my business I am still hurting and need to withdraw again - I fine paying penalties etc but I can’t find anywhere on the internet whether I am even allowed to early withdraw more than one time in a year Comment from : DJ 80 - Adie |
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My parents don't have any income but they are my dependents Can they open Roth IRA and I put maximum money in their Roth IRA accounts in addition to maximize my Roth account? Or they have to have income to contribute to Roth IRA? Comment from : Sam |
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Thanks for the info The 59 1/2 age limit comes up a lot in this discussion which confuses things a bit However, what happens to the order of withdrawal for activities AFTER age 59 1/2 which is the case for most retirees
brFor example:
brAssume the individual is already 59 1/2, and has a five year old Roth IRA with $5k and performs the actions below Is the order of withdrawal is still the same? What is taxable?:
br1) He makes a 401k conversion into a Roth IRA of $10K
br2) He pays taxes on the $10K 401k conversion out of pocket Now he has $15K in the Roth IRA
br3) He puts the $15K of the Roth IRA in a fund with 10 return At the end of the year he has a $1500 gain
br4) Considering part of the gain came from $10k he converted to the account, can he withdraw the $1500 gain? Or does five year apply to $10k portion converted?
br5) Do taxes/penalties apply to any portion of the withdrawal? Comment from : ralph Z |
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Great Job and nicely done You have made a complicated subject so easily understandable Thank you Comment from : ecobuis |
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If I am over 595 yrs old, and convert a certain amount from Ira to Roth ira, can I use that money next year w/o penalty? Comment from : Hobby Farmer |
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Hi Andy I have a question I have self-directed checking accounts One for Roth and one for Traditional All the money are in different brokerages that can hold institutional/custodial my contributions My question is what is considered a withdrawal Is it when you pull the money out of the brokerages To the self directed checking account or when you take the money out Of the checking acoount? It’s a solo 401k Comment from : Wendello Tanael |
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That was a great video! Very thorough, clear, and to the point Thank you so much for the information it was exactly what I was looking for Comment from : benb023 |
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Great video!! I just have one more question If I have a roth 401k through work and a roth ira on the side Can I only contribute 6k between the both Or 6k into both? Comment from : Jar Duuu |
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Subscribed!! Comment from : Wendello Tanael |
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Thank you for the explanation you answered a lot of my questions Can you do one for HSA I’m confused about when those medical expenses should be deducted from taxes Or should they just be reimbursed from my HSA if you find this question confusing that’s because I am confused Comment from : Wendello Tanael |
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you are so awesome Comment from : Siva Bhargav Ravella |
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I was making contributions from my bank account to my Roth IRA and my Roth IRA hasn’t been open for 5yrs and I’m not 591/2 do I have to pay taxes or a penalty fee if I withdraw my contributions? Comment from : OJ OJ |
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Hi Andy, Great video! Quick question on figuring a Roth IRA basis Early distribution under 59 1/2 Is it the total amount of contributions minus any distributions Not touching the earningsWould I also include the total amount of any conversions in the total basis amount overall? Thanks for your insight Steve Comment from : Steven Obrien |
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What do I tell my financial advisor if I want to use Roth funds to help in the purchase of a home? Comment from : Allyn Dhynes |
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Thank you for such a good explanation Comment from : XCL Services |
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Very clear information, thank you, and I have subscribed yo your channel! brMy apologies for asking but brIn early April 2020 I yanked out $7000 from my Roth IRA (foolishly thinking I had contributed twice, but I actually hadn't) The Roth IRA was more than five years old and had more than 50K in contributions saved from already taxed income brI hope I'm correct in thinking that no taxes or penalties would be due on that $7000 withdrawal - even though I was only 58 in 2020 - right?
brMy IRA provider issued a 1099R for 2020 which shows a 'distribution' of $7000 occurred, with a code of 'T' Is that correct?
brMy next mistake - Unfortunately that 1099R form was accidentally missed out of our joint tax calculations and submission for 2020 (which was mailed in last month (Here in Texas we had a June 15th, 2021 filing deadline) Do we need to submit some kind of an amendment for 2020? Does this accidental omission trigger any kind of penalties or taxes on the $7000 contribution withdrawal? brAny advice is much appreciated Comment from : WebbyWunda |
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The IRS does not agree with you at the 2:22 markbrbrI withdrew $5,000 of my contributions 4 1/2 years after I put it in The IRS sent me a bill (CP2000) I went back and forth with them for 14 months until I gave up and sent them $1,388 in taxes and interest The only other option they gave me was to prove my Roth IRA was over 5 years oldbrbrThis is exactly how they would respond back to me every time, word for word I'm looking at one of the letters right nowbr"One of the criteria for the IRA to be considered a qualified Roth IRA distribution is the Roth IRA must have been maintained for a minimum of 5 years" Comment from : Paul Stanley |
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How to use Roth IRA for kids' college costs? Comment from : Ryu Yamakawa |
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I opened a Roth IRA a couple weeks ago but I did not invest in any investments yet, am I able to transfer some of that contribution money to a regular brokerage account? Comment from : Jay A |
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You've suggested at 4:47 in the video that "Non-taxable conversions do not have a 5 year holding period or requirement that you'd be atleast 59, 1/2 yrs" - It seems incorrectbrbrPlease look at the following excerpt from motley fool (Source: wwwfoolcom/retirement/plans/roth-ira/5-year-rule/) :brbr"However, this five-year rule is different in that it applies separately to each Roth conversion you do Each new conversion starts its own five-year clock, and you'll need to account for multiple conversions to make sure you don't take out too much money too soonbrbrNote that the five-year rule applies equally to Roth conversions for both pre-tax and after-tax funds in a traditional IRA That means, if you're using the backdoor Roth IRA strategy every year, your "Roth contributions" are really conversions, and you can't withdraw them for five years without penalty" Comment from : Achit Ojha |
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I converted a roth 401k to a roth IRA in 2015 So I can withdraw the money in this account tax- and penalty-free? Assume I don't dip into gains Comment from : Gay Moderate |
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Two questions: I opened a Roth IRA in 2020 (age 67) I contributed $5 Now I intend to do a conversion of 10k from a traditional IRA to this Roth When can I withdraw that 10k to avoid all penalties? When can I withdraw the GAINS on that 10k to avoid all penalties? Comment from : FlaschDJ |
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I have 4500 in credit card debit and want to withdrawal frown my Roth IRA What kind of penalties am I looking at? What percentage should I pay to avoid my taxes being affected? Comment from : oliver stonewell |
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Very good video, helpful and informative Thank you and good job sir! Comment from : Lake DualSport |
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Nice and simple Thanks much Comment from : kraw7272 |
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I'm inheriting a Roth IRA It looks like I can convert it to an Inherited Roth IRA, and let it continue to grow for 10 years before I have to empty the accountbrWill I be able to make new investments within the Roth, or will I have to leave it the way I got it? Comment from : Images InLA |
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I wont do taxable conversion after watching this video, because I want to withdraw my money at any time I need them Comment from : John Sun |
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If I pull out a contribution, but the broker taxes it anyway, how do I request a refund for the tax? Comment from : PJ Brunet |
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Right to the point No Fluff, No Fillers Best Roth Ira Info Video I've seen yet Thanks Comment from : wannaknow |
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I could have swore I've heard from multiple reputable sources that the 5 year rule is rigidly applied to all conversions even if you are over 59-1/2? For instance, if I'm 58 and convert $10K from my trad IRA in 2021 (and pay all taxes due at that time), I was under the impression I could NOT touch that money without a 10 penalty until Jan 1, 2026 - even though I became 59-1/2 in 2022 You are saying nope, that's not true and that I can withdraw the entire amount whenever I want without penalty as soon as I hit 59-1/2??? Comment from : Joe Blow |
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Very clear and informative Thank you!!!! Comment from : T Nguyen |
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If you change brokers for your roth does the clock start over? Comment from : Mike Dickson |
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Is Roth 401k to Roth IRA rollover considered a nontaxable conversion? In such case, do earnings made in Roth 401k still considered earnings in Roth IRA? Comment from : Jaekwang Seo |
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You explain the distribution rules much simpler than my CFP study prep explains it, thanks! Comment from : Dalton |
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Good video Here’s one that most financial folk on YouTube may not understand I open a Roth IRA in 2015 In 2020, I turn 60 and I do a Roth IRA conversion In 2021, I withdraw everything Most videos I’ve seen say that tax is due on the gains related to the conversion I think there is no tax due since I meet the age test and the account age test The conversion 5 year rule only applies to the conversion amount not the gains on the conversion amount What do you think? Comment from : John Findlay |
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In March 2020, I contributed $6k in Roth IRA for 2019 In April 2020, I contributed $4K for 2020 If I withdraw $6K, will that be deducted from my contribution for 2019? Or they will take out $4K from 2020 contribution and $2K from 2019 contribution? Will I have to pay taxes? Comment from : MayaKanaKa |
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This is the most detailed, and clearly explained video on Roth IRA withdraws Comment from : Rocky Geurkink |
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Forgive me if you have previously covered this subject:brIF I obtain a Roth IRA from ex husband, through a QDRO, and I am 61 years old brCan I withdraw part of it to pay off my home? Or must I wait 5 yearsbrAlso, I do not have income, except for alimony brI am seriously confused, with all of these penalties and tax laws brPerhaps you have a recent video, that has all of the ins and outs; regarding this issue Comment from : Thankful |
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Excellent! Comment from : Mohinder Singh |
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If under 591/2, but have IRA account more than 5 years, is there a 10 penalty for gain withdraw? Comment from : Jaden Qiu |
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Love Learning pal!!! Your a great teacher! Comment from : Zach Ginn |
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