Quick Roth IRA quesiton about withdrawals...

[RedBean]

Let's say you put $2000 in for each of years 1999-2003.

Over time, that 10k basis has appreciated nicely to $17k.

Is it allowable to withdraw the original contributions up to the 10k amount, without paying a penalty or tax, as long as you aren't withdrawing the gains?

Say you wanted to take out 4k. Is this allowable without it having to be for special purposes, such as buying a home?

[haakee]

Yes you can always withdraw the principal from a Roth IRA with no penalty.

[RedBean]

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Yes you can always withdraw the principal from a Roth IRA with no penalty.

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No penalty, and for no reason. Sweet.

Thanks.

[namknils]

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Yes you can always withdraw the principal from a Roth IRA with no penalty.

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Wow, this is absolutely the worst advice I've ever seen!

RedBean,

I don't know how old you are, but I'm guessing you're not 59 1/2 yet. Therefore you will be penalized for taking premature distributions from your Roth IRA unless you meet certain requirements on what the money is used for. Here is some more information: http://www.irs.gov/taxtopics/tc428.html

[Chrisman886]

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Yes you can always withdraw the principal from a Roth IRA with no penalty.

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Wow, this is absolutely the worst advice I've ever seen!

RedBean,

I don't know how old you are, but I'm guessing you're not 59 1/2 yet. Therefore you will be penalized for taking premature distributions from your Roth IRA unless you meet certain requirements on what the money is used for. Here is some more information: http://www.irs.gov/taxtopics/tc428.html

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That's not advise, it's a statement. A correct statement at that. He's not taking a distribution, he's just withdrawing principal. There's a difference.

[NoSoup4U]

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Yes you can always withdraw the principal from a Roth IRA with no penalty.

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Wow, this is absolutely the worst advice I've ever seen!

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I believe the original advice was correct. Any amount you withdraw less than your original investment or basis has already been taxed and is not subject to penalty or additional tax. See Rothira.com or the tax law

[James Boston]

For the purpose of buying a home, you can withdraw the gains, penalty and tax free, if you meet these criteria:

1) The IRA was started more than 5 years ago
2) You are a first time home buyer
3) You are withdrawing no more than $10,000

There are more rules and you should investigate this on your own, but to answer your question, yes you can take the money (even the gains in some cases) out without penalties.

[RedBean]

I know about the home exemption on withdrawals for both contributions and gains.

I was mainly wondering if I could withdraw the contributions without penalty, and without any real purpose (going to spend it on hookies and blow, for example).

[black_russian]

You can "borrow" your contributions for up to 60 days. I did this when I bought my current home. I did not sell my first house til after closing on new house. This worked out well