The great things about an IRA include the tax savings and the growth of your money. There are some things that not everyone likes though. Among the many things that some people do not like are the Roth IRA withdrawal rules that many people have to deal with. While the rules are detailed fairly well some individuals may have questions regarding the rules that govern IRA's. It is important to understand the rules prior to opening the account. You may find that some aspect of the Roth-IRA withdrawal rules are not quite what you expected.

With a Roth IRA there are two sorts of withdrawals. The first sort is referred to as a qualified withdrawal. The second is a non-qualified withdrawal. The rules stipulate that a non-qualified withdrawal is subject to tax and possibly a ten percent penalty. That can be a rather steep charge for some. To avoid those charges you can ensure that your withdrawal is a qualified withdrawal according to the Roth IRA withdrawal rules.

Rule number one is simply that the first deposit into your Roth-IRA was five or more years ago. If it has been less than five years your withdrawal, also called a distribution, is considered a non-qualified withdrawal. If it has been more than five years since the initial deposit in the Roth IRA you are cleared on this requirement and ready to examine the next rule.

The second distinction is that you were at least 59.5 years of age at the time of the withdrawal. This is related to the fact that Roth-IRA's were created to be retirement accounts. The idea here is that you will be near or at your retirement when you begin to make withdrawals. So, age becomes a factor in determining if the withdrawal is qualified. If you were under 59.5 years of age at the time of the withdrawal may be a non-qualified withdrawal. According to the Roth IRA withdrawal rules there are exceptions though.

So, consider this. Even if you were younger than 59.5 there are some reasons that are considered qualified withdrawals and prevent you from being taxed or penalized. The first question to ask is whether the withdrawal was used to buy or rebuild your first home. (There are details to that found in the IRS publications.) If the answer is 'yes' then you have a qualified distribution according to the Roth-IRA withdrawal rules. Even if the answer is 'no' there are more exceptions to consider.

If the withdrawal(s) are the result of a disability then the withdrawal is likely a qualified withdrawal. If a disability is not the reason for the withdrawal there is still one more variety of withdrawal that is considered a qualified withdrawal.

If the distribution (withdrawal) is made to a beneficiary of a deceased account owner the distribution is considered qualified.

These are the basic Roth IRA withdrawal rules. They govern the removal of money from your IRA. Most people do not want to pay more taxes and penalties than they have to. There may be ways to move money out of a Roth IRA without subjecting the money to such charges, even if the circumstances are considered non-qualified. You can consult a professional if you need more assistance. -