Author Topic: Roth IRA withdrawals after switching account providers  (Read 2082 times)

birdman2003

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Roth IRA withdrawals after switching account providers
« on: February 19, 2014, 06:36:14 PM »
In September 2009 I opened a Roth IRA with company A and made some contributions.  In October of 2013 I transferred my entire account to a new Roth IRA account I opened with company B.

I know that in an emergency I could pull my contributions out at any time (tax and penalty free).  But I would like to know if the 5 year clock (for withdrawing earnings without penalty) was reset after I moved the money from an account with company A to a new account with company B?

Thanks!

GlassStash

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Re: Roth IRA withdrawals after switching account providers
« Reply #1 on: February 19, 2014, 07:57:55 PM »
I know that in an emergency I could pull my contributions out at any time (tax and penalty free).  But I would like to know if the 5 year clock (for withdrawing earnings without penalty) was reset after I moved the money from an account with company A to a new account with company B?

Thanks!

You are a bit off. From the IRS website:

"What Are Qualified Distributions?

A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and

The payment or distribution is:

Made on or after the date you reach age 59,

Made because you are disabled (defined earlier),

Made to a beneficiary or to your estate after your death, or

One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit)." (Emphasis added.)

So the five year window will not allow you to withdraw earnings, unless for a distribution outlined above.

markstache

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Re: Roth IRA withdrawals after switching account providers
« Reply #2 on: February 19, 2014, 08:12:58 PM »

You are a bit off.


I think you are a bit off:

http://www.mymoneyblog.com/can-i-really-withdraw-my-roth-ira-contributions-at-any-time-without-tax-or-penalty.html

Your IRS quotes refer to earnings. The OP wants to know about contributions. See the previous link with reference to relevant IRS forms. Short answer: there isn't a 5 year clock.




GlassStash

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Re: Roth IRA withdrawals after switching account providers
« Reply #3 on: February 19, 2014, 08:16:48 PM »

You are a bit off.


I think you are a bit off:

http://www.mymoneyblog.com/can-i-really-withdraw-my-roth-ira-contributions-at-any-time-without-tax-or-penalty.html

Your IRS quotes refer to earnings. The OP wants to know about contributions. See the previous link with reference to relevant IRS forms. Short answer: there isn't a 5 year clock.

Wrong. The OP states "But I would like to know if the 5 year clock (for withdrawing earnings without penalty) was reset after I moved the money from an account with company A to a new account with company B?" (Emphasis added.) The OP asked about earnings.

markstache

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Re: Roth IRA withdrawals after switching account providers
« Reply #4 on: February 19, 2014, 08:20:19 PM »
my mistake. apologies.

GlassStash

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Re: Roth IRA withdrawals after switching account providers
« Reply #5 on: February 19, 2014, 08:22:13 PM »
No apologies needed. Cheers.

birdman2003

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Re: Roth IRA withdrawals after switching account providers
« Reply #6 on: February 20, 2014, 07:57:31 AM »
For some reason I was convinced I could withdraw the earnings without penalty as long as I waited 5 years after the account was opened.

Thanks for clearing that up!