Accessing Roth IRA Funds Before Retirement

Choosing a Roth IRA for an investment tool for retirement is a great idea. One of these Roth IRA accounts will allow your retirement money to build over the years, and you won't have to pay out any taxes on your distributions. That can really help you out in later years when your sources of income may be few. While a Roth IRA is meant to help fund your retirement, you may have an occasion to use it at a different point in your life.

Sometimes, people need to access some of the money in their Roth IRAs before they reach retirement age. While it is best to leave this money alone for as long as you can, sometimes the need to draw money out of your account cannot be avoided. Before you do go and take money out of this account, you should stop to consider what the repercussions of doing so are going to be. You don't want to do anything that could end up jeopardizing your financial situation now or in the future, so learning the rules is a good idea.

Rules for Withdrawals

If you are over 59 and 1/2 and your account has been active for 5 years or more, then you are going to be able to take out money from your account without any penalties. If, however, you are younger than this, then there will be certain restrictions that apply. However, you are always going to be allowed to withdraw what you make in contributions no matter what age you are. That means if you contribute $2,000 a year and you need to borrow that much, then you will be able to do so without any penalties or fees. If you take more than you contribute, then you could end up having to pay taxes and other fees on it.

There are some exceptions to these rules, so you should take care to learn them. They may end up really benefiting you at some point later in your life. One of the things that you will be allowed to do at any point is to take out $10,000 from your account for the purchase of your first home. You can borrow up to this amount from your account and you will not have to face any penalties or extra taxes on this money.

Another one of the exceptions that will allow you to take withdrawals from your Roth IRA without penalty is if you are using the money to pay for higher education costs for you or your family members. If you are thinking that you'd like to go back to school and further your education or you want to help pay for your child's education, then you can rely on the money that you have in your Roth IRA to help you pay for these expenses. And you won't have to worry about paying any extra fees for doing so.

Talk to Your Financial Advisor

If you want to learn more about accessing Roth IRA funds before retirement, then you should speak to your financial advisor about this. There are a lot of other exceptions under which you may be able to access some of these funds, and your financial advisor is going to be the best person to ask about them. You can learn a lot about these Roth IRA withdrawal rules on your own, but it's best if you get some advice from a professional who has dealt with these types of accounts in the past.

Roth IRA

Roth IRA