A Roth IRA's headline benefit is tax-free withdrawals, but only if you follow the IRS rules. Here is the short version: you can take out your contributions any time, at any age, tax- and penalty-free. The earnings are tax-free only once you are 59 1/2 and the account has been open at least five years.

Because a Roth IRA is funded with after-tax dollars, you already paid income tax on your contributions. The IRS applies timing and age rules to decide whether a withdrawal of earnings is "qualified," meaning tax-free.

Contributions vs. earnings

Withdrawals are treated differently depending on which part you take.

Contributions come out first, and always tax- and penalty-free, regardless of your age or how long the account has been open. This is what makes a Roth IRA more flexible than most retirement accounts.

Earnings (the growth) are tax- and penalty-free only when both conditions are met: you are at least 59 1/2, and your first Roth IRA has been open for at least five years. Meet both and the whole withdrawal, contributions and earnings, is a qualified distribution.

Roth IRA income limits

The IRS limits who can contribute to a Roth IRA based on modified adjusted gross income (MAGI), and the ranges move most years. See the Roth IRA income limits guide for the current-year breakdown.

2026 Roth IRA income limits

Single filers:

• Full contribution if MAGI is under $153,000
• Partial contribution between $153,000 and $168,000
• No direct contribution at $168,000 or more

Married filing jointly:

• Full contribution if MAGI is under $242,000
• Partial contribution between $242,000 and $252,000
• No direct contribution at $252,000 or more

2025 Roth IRA income limits

Single filers: full under $150,000, partial $150,000–$165,000, none at $165,000 or more. Married filing jointly: full under $236,000, partial $236,000–$246,000, none at $246,000 or more.

Contribution limits

• 2025: $7,000, or $8,000 if you are 50 or older
• 2026: $7,500, or $8,600 if you are 50 or older

If your income falls in the phase-out range, your allowed contribution is reduced. Above the range, a backdoor Roth IRA is still an option.

The Roth IRA five-year rule

To withdraw earnings tax-free, your Roth IRA must have been open at least five years, on top of the age 59 1/2 requirement. The clock starts January 1 of the year of your first contribution to any Roth IRA.

Many people assume that turning 59 1/2 is enough. It is not. If your account is younger than five years, an earnings withdrawal is taxed as ordinary income even if you are 65. There is no 10% penalty once you are past 59 1/2, but the income tax on the earnings still applies until the five-year mark.

This rule applies only to earnings. Contributions can always be withdrawn tax- and penalty-free.

Qualified distributions

A qualified distribution is both tax-free and penalty-free. It requires:

• You are at least 59 1/2, and
• Your first Roth IRA has been open at least five years.

Death and disability partly change this. If the account holder dies or becomes disabled, distributions are no longer subject to the age 59 1/2 requirement or the 10% penalty. The five-year rule still applies: it is measured from the original owner's first Roth contribution, not the date of inheritance, so if that window has not closed, a beneficiary's earnings withdrawals are taxable even though no penalty applies. Beneficiary designations are covered further in our estate planning resources.

Non-qualified distributions

You can take money out of a Roth IRA any time, but a withdrawal that fails the age or five-year test is non-qualified. It is not fully taxable: only the earnings portion is taxed, and your contributions still come out tax- and penalty-free.

If you withdraw earnings before 59 1/2 or before the account is five years old, those earnings are taxed as ordinary income, and if you are under 59 1/2 you also owe a 10% penalty unless an exception applies.

Withdrawals before age 59 1/2

Under 59 1/2, you request the distribution from your account provider and report it on Form 1040. Any earnings included may be taxed and hit with the 10% penalty.

Exceptions can waive the penalty, including a divorce-related transfer. If a court orders you to give part of your IRA to a former spouse and you do it as a direct trustee-to-trustee transfer, there is no tax or penalty. If you instead withdraw the money and hand it over yourself, the IRS treats it as a distribution, and tax and penalty apply to the earnings.

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Withdrawals after age 59 1/2

Once you are 59 1/2, you can withdraw from a Roth IRA with no 10% penalty. If the account has been open at least five years, the withdrawal is fully tax-free. If it has not, your earnings are taxed as ordinary income until you reach the five-year mark, but there is no penalty. Your contributions always come out tax-free.

A Roth IRA also never requires minimum distributions during the owner's lifetime. You can leave it untouched for as long as you want, or pass it to heirs.

Final thoughts

A Roth IRA gives you tax-free income and unusual flexibility, but the earnings side depends on meeting both the age and five-year rules. If you are mapping out withdrawals across accounts, comparing this with a Roth 401(k), or still deciding between a Roth and a Traditional IRA, a Certified Financial Planner can help you sequence withdrawals to keep the tax bill down.

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