Retirement brochurePRINT THIS PAGE | EMAIL THIS PAGEKnowing when and how to access your Roth IRA savingsAccessing your Roth IRA accountThis brochure describes the ways you can choose to receive income from your Roth IRA. With a Roth IRA, contributions are made with after-tax funds. Earnings grow tax-deferred and will be tax-free upon withdrawal if part of a qualified distribution. Show
The withdrawal rules for a Traditional IRA account are different from a Roth IRA. If you have a Traditional IRA, please refer to the brochure, Traditional IRA Withdrawal Options. What are qualified distributions from my Roth IRA?A qualified distribution requires both of the following conditions be met:
Can I take a distribution from my Roth IRA before I meet the above events?Yes, you can take a distribution from your Roth IRA at any time. Contributions are withdrawn first and are always tax- and penalty-free. You will, however, be required to pay taxes on any withdrawn earnings. Will the 10% tax penalty apply to early distributions from my Roth IRA?Yes, you will be required to pay the 10% penalty on any withdrawn earnings, unless you meet one of the penalty exceptions. What are the Roth IRA penalty exceptions?You can take nonqualified distributions from your Roth IRA for the following purposes (without IRS early withdrawal penalties):
If your distribution is not a qualified distribution but is for one of the above purposes, you will be required to pay taxes on withdrawn earnings, but you will not have to pay the 10% penalty tax. For example, if you take a distribution to pay for college expenses for your child but have not held your account for at least five years, you are exempt from the 10% penalty. However, you are required to pay taxes on any withdrawn earnings. Do I have to take distributions from my Roth IRA at age 72?No. Unlike the Traditional IRA, which requires you to take minimum distributions, the Roth IRA does not. However, your beneficiary will have required distributions depending on the type of beneficiary. If I have made regular contributions to a Roth IRA and have converted a Traditional IRA to my Roth IRA account, how do I determine which order applies to distributions?The IRS rules consider withdrawals in the following order: • Roth IRA contributions. Since I have already paid taxes on my contributions, will I need to pay taxes again on the contributions when I take distributions?No. You may withdraw your contributions at any time with no tax or penalty. One of the advantages to saving with a Roth IRA is the ability to withdraw your contributions if you have an unforeseen circumstance. However, removing your contributions will reduce your ability to fully realize the most important benefit of the Roth IRA—long-term, tax-free growth. Tax reporting and withholdingTaxes (and possible early withdrawal penalties) may apply to distributions received from your Roth IRA. We will send you Form 1099R, summarizing your withdrawal activity, which you should use when preparing your income tax returns. Note: You are required to report your withdrawals and file Form 8606 with your tax return, even if you take a nontaxable distribution that is equal to or less than your total contributions to all of your Roth IRAs. Retirement income options available with your Roth IRAPlease remember that the taxable portion of your distribution is taxed as ordinary income for the year in which you withdraw it. Withdrawals using these options may be subject to 10% federal income tax withholding unless you elect no withholding. The money can be sent to you as a check or electronically deposited in your checking or savings account. Here are the ways you can receive income from your account:
For more information about your retirement income options, please contact us at 1-800-279-4030. IRA 3196-292-0421 (W) Effective April 2021. Policies and programs described are subject to change at any time. |