You can take your contributions without penalty, but of course it's my money but the earnings it accumulated will be with them (they will take the interests earnings it accumulates from investment while they sit around) until you turn 59.5 years old or you are dead ,lmfao! Fookin' genius legal Ponzi Scheme.
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I have wasted 4 hours on understanding this. But, you have done a simply phenomenal job explaining it (so much so that I am going ahead with Roth IRA). Simply brilliant!!
God! Thank you!!!! Iʻve listened to Suze Orman a thousand times and still get confused. You are the best at explaining this. Very CLEAR and CONCISE. Thank you sir.
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
@JacquelineTheresa I agree. From my own experience with an investment advisor, I've got $1 million in a diverse portfolio that's growing fast. It's not just about having money for stocks; you need to know your stuff, stay determined, and be resilient.
@@KellyClarkson122 VICTORIA CARMEN SANTAELLA is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
@@ChristopherAnthony-9 Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
Can you do a more in depth discussion about Roth IRA conversations, age 59 1/2, 5 year rule? I’d like to take advantage of the down market and my low retirement income to convert a rollover IRA. Thanks
Worth noting for future reference: "after 5 years" also means the "6th year". For example, if 2023 is year 1, 2028 is both "5 years after" and the "6th" year. (because 2023 is the 1st year). Sounds obvious but easy to forget and get tripped up on.
For some Roth timetables, a contribution done in December for instance, will get credit all the way back to January 1st of that same year. So by that system of counting, the 5 year requirement could be done in about 49+ months? A contribution made later, by say April 10th for example, would not get credit for the deposit all the way back to January 1st of the Roth contribution year, as I understand. Thanks for your input!
Thanks for the great explanation and correct info. Unfortunately, the internet is full of misinformation and that can be costly and confusing for people to believe in. watched several videos but none of them were very accurate and you explained key information in a short time.
@@FinancialFastLane I have 2 adult daughters and while I think I am still healthy to be around for a few more years, I have thought there might come a time when I could split my Roth IRA into 2 identical accounts with each daughter being a different beneficiary. Not sure in their early 40's that they understand the process to have one inherited Roth which needs to be split. Is this completely a waste of time? Thank you for the great presentation!
@@KarenDemille you simply designate 50% to one daughter and 50% to the other. Then at your death, they will each receive an inherited Roth IRA. It cannot be split and given to them prior to your death.
Just to clarify: for example if I want to take out $3,000 from my Roth IRA (I have contributed way more than that) then I won’t be taxed or penalized regardless of my age and time I’ve had my Roth open?
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family...
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@IbrahimIsabella-00 Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* , a licensed fiduciary whom has made me over 5 figures in profit in less than seven months, handles my investments. I could leave you a lead if you need help...
I'm still a little unclear on conversions. If I converted after-tax 401k contributions into a Roth 401k and then later converted than Roth 401k into a Roth IRA, when does the clock start? At the first conversion to Roth, or at the conversion from 401k to IRA?
This video suggests twice original contributions can be taken out penalty free. The video also suggests the IRS knows the contribution amount. How does someone location the contribution amount to a 20-year old Roth IRA when brokers do not keep 5498’s beyond 10 years, the IRS tells taxpayers to only keep records for 7 years, and IRS does not supply records further back than 10 years? I know what was contributed from a spreadsheet, but have no broker or IRS proof.
So, does the IRS consider the amount of your TOTAL contributions across all accounts as a single amount which, if you withdraw EARNINGS from one account but the withdrawal amount doesn’t exceed the total amount of your CONTRIBUTIONS across all accounts, you can still withdraw those EARNINGS tax and penalty free before 59 1/2-as if they were contributions? (Considering you’ve had one of the accounts for more than five years.)
The IRS does consider the TOTAL contributions across all Roth IRA accounts that you have. From the IRS stand point you have only one Roth IRA regardless of how many accounts you have have. The contributions come out first tax and penalty free but if you pull out all of the contributions and dip into the earnings then those will have a penalty prior to 59 1/2.
@@FinancialFastLane, so even if it’s technically the earnings in one account, it’s still considered contributions if you’ve contributed more than that amount in the other Roth IRA?
@@xxpowwowbluexx Yes, you only have one Roth IRA, even if you have 100 different Roth IRA accounts at 100 different custodians. The IRS says it is all one big Roth IRA.
I love to watch your videos. Very informative. What savings do you recommend for kids future/ education? Is there any good savings plan for kids? I am looking for the savings plan where we can use that money for kids needs in future but not only for their education.
Fab video Lane, thanks much !! A clarifying question if I may, dealing with withdrawal of earnings. Noting that the order of withdrawals are contributions, conversions, and earnings. Example: let's say I'm 61. And I opened a contribution Roth IRA 11 years ago at age 50. And I then set up a Trad-to-Roth conversion IRA 3 years ago at age 58. According to what you said at minute 4:38, I can withdraw ALL of my Roth IRA funds, tax and penalty free (on the contribution, conversion, and earnings on both) because (a) I have met the 59 1/2 age rule (I'm 61), and (b) I've had "any" Roth IRA for 5 years (my contribution IRA = 11 years old). Regardless that my conversion IRA is only 3 years old. Is this correct? Cheers n crisps !!
Yes, you are correct! The only thing that still has a 5 year clock are any gains accumulated after a conversion. Every Roth conversion has a 5 year clock. All of the converted dollars can be accessed tax and penalty free but not the gains on those funds if they are invested and start to have new gains.
@@FinancialFastLane Thanks for the reply, Lane. Just after I posted my question to you, I actually found the answer on the website of Cornell Law School Legal Information Institute. What I stated above in my example is correct, that no taxes or penalties are due on any part of the distribution, whether contribution or conversion or earnings. This is so complicated, I've spent untold hours on this off and on, across many days months years, ugh. About your answer, you are of course correct on a separate 5 year clock for each conversion, but it doesn't apply to my example, and I haven't looked into it further to see when it would apply. It would be good to see an example problem though. And as you say, gains on converted funds may be assessed tax and penalties, but only if they are non-qualified distributions of earnings. Qualified distributions of earnings however are not subject to tax and penalties. And per my example, my distribution is 100% qualified: I am over 59 1/2 years old, and my first Roth was set up more than 5 years ago. The first Roth set up can be either a contribution or conversion, whichever is set up first then gives you the 5 year rule start date that applies to all current and future Roths. So for my example, the earnings of any future Roth conversions will be also be qualified and not subject to taxes or penalties, even if I hold them less than 5 years. I'll post the 2 websites I found in another post here below, without web links, so it won't be removed. There are multiple excellent sample problems to illustrate the tax code. I should also say, I read on one of these sites that IRS Publication 590-B is an summary of the IRS tax code regarding all this, and is not the code itself. It was written by someone trying to summarize the code, as a guide / for general information purposes only, which may not be the exact legal tax code. That's the first time I ever read anything like that about any IRS publication, will note it for future use, ha. To be continued below (or above?)...
@@F8NcH8Ng Sorry, your conclusion is not quite complete.There is more than one 5 year clock! You have satisfied one of them but every Roth conversation has it’s own 5 year clock.
@@FinancialFastLane OK, part 2, with the websites I found to explain all this. First up is an article titled "The Taxation of Roth IRA Distributions". This is by The FI Tax Guy, and I hope this can be found by doing a search for " fi tax guy the taxation of roth ira distributions " dated July 31, 2023. There is excellent info here with sample problems, and references to the Cornell Law School Legal Information Institute and their interpretation of the IRS tax code itself. Example problem #3 (about halfway down) is closest to my sample problem above. To find the Cornell site I mentioned, do a search for " cornell law school legal information institute 1.408A-6 " . The first article references the appropriate sections in the second. Thanks for your help !!
@@FinancialFastLane Just one last thing to tie up this loose end for any future readers. Yes, every Roth conversion has its own 5 year clock, but this rule only applies to "unqualified distributions". Thus if the distributions are "qualified", then this "every Roth conversion 5 year clock" rule goes away. "Qualified distributions" = your age > 59 1/2, AND you have held your first Roth IRA (by contribution or conversion) for at least 5 years; and thus all current and future Roth distributions are tax and penalty free, whether they consist of contributions, conversions, or earnings. And the same goes for any new Roth IRAs that you set up in the future, by contribution or conversion; no tax and no penalty, you are home free forever. Or to phrase it another way, all these other confusing complicated beat-your-head-against-the-wall Roth distribution rules (5 years, taxes, penalties, contributions vs conversions vs earnings, withdrawal order of distributions) only apply to "unqualified distributions". Once you are "qualified", all these other rules go away. Also keep in mind that all your Roth IRAs are considered by the IRS to be just one single big pot, no matter how many separate Roth accounts you have, at how many institutions. Also, a Roth “contribution” is defined by the IRS as either (a) a regular contribution or (b) a conversion contribution. This specific clarification unfortunately wasn't included in IRS Publication 590-B (which is a summary/guide of the tax code but is NOT the tax code itself); but it's in the tax code, the Cornell Law School writing of the tax code (mentioned above), the "fi tax guy" article (mentioned above), and in the Kitces blog article "Understanding The Two 5 Year Rules For Roth IRA Contributions and Conversions". OK I'm worn out now, ha. Thanks Lane !!
Great video! One question. I opened Roth 401k 6 years ago and Roth IRA 3 years ago. I am 60. If I roll the Roth 401K into the Roth IRA is withdrawing all the monies in the Roth IRA completely tax and penalty free? Or do need to wait 2 more years? Thanks!
@@carrie1359 It sounds like it would be all tax and penalty free. However, depends on how old your Roth IRA is (at least 5 years old) and also if there are any conversions done within the last 5 years.
@@FinancialFastLane My Roth 401K is 6 years old and my Roth IRA is 3 years old. There were no conversions done at all yet on any of my retirement accounts.Thanks!
@@carrie1359 You have to have a Roth IRA for at least five years for the gains to be tax-free. Contributions can be withdrawn all tax free, but you will not have tax free growth until after the Roth IRA is at least five years old.
I converted my 401k from a job I left and paid full taxes on it and got my Roth 401 from another job and transferred it all into my Roth IRA. Am I allowed to withdraw those conversions penalty free even though it has not been 5 years since the conversion and I am way under 59?
To be crystal clear, once the 5 Yr clock is satisfied on the initial Roth conversion for someone over 59 1/2, are all Roth dollars (conversion amount and earnings) available from that same anniversary date as the of the initial conversion? For example, Initial conversion in 2015, subsequent conversions in 2016, 2017 etc. Are all the converted amounts and earnings from all the subsequent years available tax free in 2020, or as I have also heard that there is a new 5 year period required for each conversion?
The day you reach 59.5 y/o, there are no more 5 year conversion wait rules. You are now considered qualified and everything in your Roth is available tax and penalty free......I think! I kept reading and learned that any earnings withdrawn even after 59.5, but prior to the 5 year wait period ending, the earnings for that one sub 5 year conversion would be taxed. Helps to keep reading!!!!!
Forgive me if this is a silly question, but assuming I invested every dollar into my ROTH IRA, can I still withdraw up to the amount that I have contributed (ignoring the other clock rules)? What are the mechanics of that? Do I choose which investments to sell a portion of the withdraw the contribution?
The specific investment holdings within a Roth IRA are not taking into account, that doesn't matter. The total of all contributions can be withdrawan at any time tax and penalty free.
lets say i roll over my roth 401k into a new roth IRA. This will be considered 'conversion" money. When do the taxes get paid for the gains + employer match contributions? At the time of rolling over the roth 401k into a roth ira, or at the time of withdrawling the conversion funds from the roth IRA?
The conversion would be added to your gross income for that year. You typically do not want to convert a full 401(k) all in one year. It’s much better to strategically do it in smaller chunks over several years.
Do I need to file any tax forms if I pulled out roth contributions only after 5 years but under 59 1/2 years of age? Thanks for input trying to figure out if I need to file anything on my yearly taxes
I just want to withdraw the money I contributed 12 years ago and walk away with the earnings keep earning until retirement. I can do that without penalties, right?
So for example if I invest $5000 into voo and it earns $3000 and I then take out my contribution of $5000 the $3000 will stay at $3000 until 59 1/2 correct?
Thanks for the video, had a specific question regarding Roth 401k to Roth IRA rollovers: My Roth 401k consists of Contributions and Earnings. If I retired very early and rolled that Roth 401k into my Roth IRA, would the rolled over money still be considered Contributions and Earnings when it rolls over into the Roth IRA? If so, wouldn't that technically mean that I am able to withdraw contributions from my Roth 401k early without penalty, by first moving it over into a Roth IRA (where the rules allow me to withdraw Contributions at any time tax + penalty free)?
Question. Do you need to sell your stocks on the roth ira first before you can withdraw them? I try to withdraw as a sample but its zero in the withdrawable cash Thank u so much
This question is impossible to answer in a comment. It depends on your age, goals, risk tolerance etc, which will be very different from person to person.
Thanks for a simple explanation. Im in my 60s and my etrade ira roth account gives me a option to click a button if i want to adjust a wash sale?? should i swith this on or not?
Thank you. Is it 5 years from the date of conversion? Like u convert traditional IRA to ROTH IRA on January 10th 2020. Does it become tax free withdraw January 11th 2025 or after December, 31, 2025? Thx.
No it is not specific to a day only the year. So for example if you did a Roth conversion December 2nd of 2024 it is as if you did it on January 1st of 2024. So the 5 year clock is actually less than 5 years depending on when you do the conversion with in the year.
If I have full access - a long established IRA and over 60, may I BOTH contribute and withdraw from the account freely like it is a typical bank account of sorts? No rules on regular withdrawals or deposits (besides the annual deposit limits) or timing apply?
The earnings are taxable only if you have withdrawan all of your contribution dollars and all of your coverted dollars and you also withdraw the earnings on converted dollars before the 5 year time frame was met. It's not a very likely scenario. It would mean that your Roth IRA is almost depleated.
If you convert 50% of your traditional IRA to a Roth And pay your taxes. At conversion , is there any tax ramifications when withdrawing from your Roth after 5 years and if you’re over 59.5 years of age? Or must you convert 100% of your traditional Ira to avoid taxation on Roth withdrawal?
Good day. I have to withdraw money from IRA to pay for my college. I know that withdrawals from IRAs before age 59½ are subject to a 10% penalty. But if I use the withdrawals to pay for qualified education expenses (in this case, my college tuition), I may not have to pay this penalty. I have one other brokerage account too, so do I have to exhaust that first (plus any money in my bank account) prior to withdrawing money from my IRA account without being penalized? Or can I just leave my brokerage account alone and withdraw the IRA without being penalized using the criteria mentioned above? Thank you.
I understand that earning withdrawls will always be taxed before 59.5 but will there always be a penalty? I've had the account for 10 years (37 years old now). If I pull out my earnings will those be subject to the 10% penalty?
I hope you are not planning to withdraw all of the funds in one year..? Roth funds are the most valuable because of the tax free growth. Maybe you are refering to a rollover and not a withdrawal?
This is very helpful, but I do have questions: If I am over 59 1/2, and I have invested all my Roth funds into stocks, which made me some earnings over the years. So are you saying for the portion of earnings that is made over the last five years, I won't be able to withdraw without getting penalized? Thanks.
How long ago did you first establish your Roth IRA account? If it is more than 5 years ago AND you are over 59 1/2 then everything will be tax free. If you first opened your Roth less than 5 years ago, then you would need to wait until 5 year for the gains to be tax free. Hope that helps!
@@FinancialFastLane I established my first Roth IRA in 1998 and am over 59-1/2. I started converting some traditional IRAs when I turned 60. Does that matter, or am I tax, penalty, and 5-year-rule-free when it comes to withdrawing any or all of my Roth? Can I stop creating separate Roth accounts to keep track of conversion clocks? Is the tax on distributions when I convert more traditional IRAs the only thing left to worry about?
@@generic_official Yes! Since you have had a Roth IRA for 5 years and you are over 59 ½, all Roth IRA dollars are immediately available tax and penalty free. This includes earnings on any converted dollars, even if the conversion was done recently, and on all future conversions. At this point, there are NO 5-year clocks to ever worry about. Everything is and will forever be tax-free. (As an aside, there is no need to establish different Roth IRA accounts for each conversion. IRS Form 5498 essentially “time stamps” each conversion, so all dollars can be commingled.)
Okay! So I'm 65 as of June this year. I have only a Roth account that I've had for twelve years. I have no conversions and have been contributing the max. every year. These contributions have bought stocks with high yeilds (TD Ameritrade) and collecting dividends that are reinvested. If I stop reinvesting the dividends turn in to cash in my Roth account. Am I aloud to just take a distribution of that cash every month or do I have to sell the stocks that the contributions bought in the first place? My goal is/was to retire and live off of the dividends produced by the stocks. Is that even possible? Thanks
There is a 5 year clock on every conversion regarding gains. When over 59 1/2 100% of coversions are available but for any new gains you would have to wait 5 years for those to be tax free.
@@FinancialFastLane tax would be paid on the full pre-tax contribution and its gains during the conversion, so it seems that only the post-conversion gains would be taxable (but not penalized) if the retiree dipped that far into the 3rd bucket and distributed earnings within the 5 years after conversion.
@@hornbaker That is correct as long as the person is over 59 1/2. If you are over 59 1/2 and you want tax free gains then you would have to wait to access the gains. If not then there the gains woud be taxed but no penalty because of age.
Is this the same for a ROTH 403B? If I have one and I have had another ROTH for more than 5 years, no problem withdrawing contributions from day one (yes and over 59.5 too) Obviously, the point is to put this money in and NOT take it out for a long time, but incase i needed to, I could. Thanks.
Generally speaking yes, but employer sponsored plans can have some unique rules set by the employer. Typically you can also do an in-service rollover to a Roth IRA when you’re over 59 1/2.
I’m 26 turning 27 next month, I just graduated so I don’t have a job just yet but I do have savings. Would it be smart to make an initial deposit of $1000 into a Roth IRA then when I get a job I max it out yearly?
I'm 31 and have had my Roth IRA for 7 years. If I withdrew earnings would they be taxed AND penalized even though I've had the account for over 5 years? I'm not going to withdraw anything, I'm just curious how it exactly works.
If I have a roth ira for over 5 years but just started maxing out contribution this year, is it penalty free if I start withdrawal in two years at age 60 retired?
Hello sir, im trying to plan an early retirement. Im curious if my understanding of your video is correct. Let's say i contribute $300,000 into a roth ira over my life. Then i turn 49, i liquidate the assets within the roth but keep the money in the Roth account. I use the money to purchase high yielding dividend assets. Then, as those dividends are deposited into my brokerage account, i should be able to withdraw them up to the $300,000 limit right? Unless of course i hit age 59.5 before then. Am i missing something hear or is my thinking correct?
While "self directed Roth accounts" are beyond me, there is a way to buy real estate property and keep it in a Roth account. There are restrictions, like not living in it or allowing family to live in it for instance, but there are self directed Roth accounts out there. For me they're kinda complicated and the value of such an account holding would require an appraisal(annually???) Just something to maybe look into.
What happens if I contribute $3000 and I lose $1000 of it. But then I make $1000 of gains back totaling my cash back to $3000. Would I be able to still pull $3000 without tax penalty or is that $1000 considered taxable gain?
while it never happened to me, I pondered the same scenario. Hopefully you will have a long lifetime of contributions and/or conversions and not need to tap your retirement accounts. Good reason to think about having a separate emergency fund!
There are no penalties and no taxes when withdrawing contributions of a Roth IRA. So, depending on how much you have contributed that total amount could be withdrawal tax and penalty, free at any age.
Hi there. If I rolled a 401k to a Roth IRA is the whole amount considered a contribution or conversion? I paid takes on the rollover. Think it's a conversion, but just want to confirm. Thanks.
If you rolled a pre-tax 401k into an after tax Roth IRA that would be called an inflight Roth conversion. Usually that is not recommended as you are probably paying too much in taxes (depending upon the size of your 401k).
The withdrawal order rules would be the same but there are of course some other differences. Most people rollover their Roth 401k into a Roth IRA which is something you may want to consider.
I have a senarios if anyone can help me. I opened ROTH IRA in 2021 contributed 6k, in 2022 contributied 6k, and in 2023, so far, i have contributed $4,250. My account is showing gain of $995 from earning (on top of my contributions). This year i’m buying a house. Can i withdraw $16,250 that i had contributed without tax and penalty to put downpayment on my first house? I would appreciate if somoene could answer my question. Thank you.
I’ve the same question. My understanding is our contribution is always penalty free, no matter when we can withdraw but I want to make sure that’s accurate.
This is one of the few videos about Roth IRAs that I have seen that is completely correct. Thank you for giving this vital information to people.
You can take your contributions without penalty, but of course it's my money but the earnings it accumulated will be with them (they will take the interests earnings it accumulates from investment while they sit around) until you turn 59.5 years old or you are dead ,lmfao! Fookin' genius legal Ponzi Scheme.
if only all financial education content creators were as brief and concise as you are... thank you!
Simple, clear, accurate, straightforward
Its worse here, our economy is like a flailing fish, fighting for its life. The normal state of the U.S. economy is actually very bad. Because of this it goes into convulsive spasms fighting to grow any way it can out of desperation. Tricks, gimmicks, rule changes try to stimulate the economy and prevent it from falling but they only bring temporary relief to people since, when you factor in inflation we are declining.
People believe their currency has the worth it does because they have no other option. Even in a hyperinflationary environment, individuals must continue to use their hyperinflationary currency since they likely have minimal access to other currencies or gold/silver coins.
Inflation is gradually going to become part of us and due to that fact any money you keep in cash or in a low-interest account declines in value each year. Investing is the only way to make your money grow and unless you have an exceptionally high income, investing is the only way most people will ever have enough money to retire.
I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value. I would be happy if you could advise me based on how you went about yours, as I am ready to go the passive income path.!!
My CFA NICOLE ANASTASIA PLUMLEE a renowned figure in her line of work. I recommend researching her credentials further... She has many years of experience and is a valuable resource for anyone looking to navigate the financial market..
I just looked her up on the web and I would say she really has an impressive background in investing. I will write her an email shortly.
One of the most clear and concise explanations I’ve found! Thanks for the info, you cleared up a lot of confusion for me.
I have wasted 4 hours on understanding this. But, you have done a simply phenomenal job explaining it (so much so that I am going ahead with Roth IRA). Simply brilliant!!
This is hands down the _clearest_ explanation I have heard of Roth IRA's. Thank you!
This is the clearest explanation I have seen on TH-cam thank you
Thank you, glad it was helpful!
God! Thank you!!!! Iʻve listened to Suze Orman a thousand times and still get confused. You are the best at explaining this. Very CLEAR and CONCISE. Thank you sir.
Excellent information,now I have it clear how it works,very well explained. Thank you Sir!
Outstanding and perfect video for exactly the information I was looking for. Thank you sir.
Thank you for your comment. You are welcome!
Buying stocks might seem easy, but picking the right one without a solid plan is tough. I've been trying to grow my $100K portfolio, but the tricky part is not having clear plans for when to buy and sell. Any tips on this would really help.
@JacquelineTheresa I agree. From my own experience with an investment advisor, I've got $1 million in a diverse portfolio that's growing fast. It's not just about having money for stocks; you need to know your stuff, stay determined, and be resilient.
@@ChristopherAnthony-9 Mind if I ask you to recommend this particular coach you using their service?
@@KellyClarkson122 VICTORIA CARMEN SANTAELLA is the licensed advisor I use. Just search the name. You’d find necessary details to work with to set up an appointment.
@@ChristopherAnthony-9 Thank you! I entered her full name into my browser, and her website came out on top. I filled her form and i hope she gets back to me soon.
Can you do a more in depth discussion about Roth IRA conversations, age 59 1/2, 5 year rule? I’d like to take advantage of the down market and my low retirement income to convert a rollover IRA. Thanks
Worth noting for future reference: "after 5 years" also means the "6th year". For example, if 2023 is year 1, 2028 is both "5 years after" and the "6th" year. (because 2023 is the 1st year). Sounds obvious but easy to forget and get tripped up on.
For some Roth timetables, a contribution done in December for instance, will get credit all the way back to January 1st of that same year. So by that system of counting, the 5 year requirement could be done in about 49+ months? A contribution made later, by say April 10th for example, would not get credit for the deposit all the way back to January 1st of the Roth contribution year, as I understand. Thanks for your input!
Thanks for the great explanation and correct info. Unfortunately, the internet is full of misinformation and that can be costly and confusing for people to believe in. watched several videos but none of them were very accurate and you explained key information in a short time.
Good information. I was going to open two Roth IRA. One from Fidelity and the other one from Vanguard.
Why two?
@@FinancialFastLane I have 2 adult daughters and while I think I am still healthy to be around for a few more years, I have thought there might come a time when I could split my Roth IRA into 2 identical accounts with each daughter being a different beneficiary. Not sure in their early 40's that they understand the process to have one inherited Roth which needs to be split. Is this completely a waste of time? Thank you for the great presentation!
@@KarenDemille you simply designate 50% to one daughter and 50% to the other. Then at your death, they will each receive an inherited Roth IRA. It cannot be split and given to them prior to your death.
Just to clarify: for example if I want to take out $3,000 from my Roth IRA (I have contributed way more than that) then I won’t be taxed or penalized regardless of my age and time I’ve had my Roth open?
That is absolutely correct!
Very clearly and well explained. Thank you so much!
Thanks for the summary. Can you describe the differences between Roth IRA and Roth 401k withdrawal rules.
Amazing video, everything is clear. Subscribed right away!
Concise & to the point. Taking out the confusion Of Roth withdrawal rules.
A very post. Information I’ve been eagerly searching for. Thank you sir.
Thank you for your timely info. Though your audio levels are a little low. Thanks.
Thank you so much! That was very clear and answered all my question in few minutes.
Best video on Roths on TH-cam!
really good video, but your audio is really low. had to max out the speakers and still hard to hear.
Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months , my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family...
I’ve been forced to find additional sources of income as I got retrenched. I barely have time to continue trading and watch my investments since I had my second daughter. Do you think I should take a break for a while from the market and focus on other things or return whenever I have free time or is it a continuous process? Thanks...
@@IbrahimIsabella-00 Quitting may not be the best approach if you ask me. This is where an AI comes into the picture. I barely have time to trade myself as my job swallows up most of my time. *MARGARET MOLLI ALVEY* , a licensed fiduciary whom has made me over 5 figures in profit in less than seven months, handles my investments. I could leave you a lead if you need help...
@@YinusaSaheed Oh please I’d love that. Thanks!
*MARGARET MOLLI ALVEY*
Lookup with her name on the webpage
Lane looks like a 1950s Madison Ave ad exec straight from the show Mad Men lol
Very clearly answered my question! Thank you so much!
I'm still a little unclear on conversions. If I converted after-tax 401k contributions into a Roth 401k and then later converted than Roth 401k into a Roth IRA, when does the clock start? At the first conversion to Roth, or at the conversion from 401k to IRA?
Well done. Nice concise explanation.
What would dividend payments be classified as? I’m guessing earnings?
Yes
This video suggests twice original contributions can be taken out penalty free. The video also suggests the IRS knows the contribution amount. How does someone location the contribution amount to a 20-year old Roth IRA when brokers do not keep 5498’s beyond 10 years, the IRS tells taxpayers to only keep records for 7 years, and IRS does not supply records further back than 10 years? I know what was contributed from a spreadsheet, but have no broker or IRS proof.
So, does the IRS consider the amount of your TOTAL contributions across all accounts as a single amount which, if you withdraw EARNINGS from one account but the withdrawal amount doesn’t exceed the total amount of your CONTRIBUTIONS across all accounts, you can still withdraw those EARNINGS tax and penalty free before 59 1/2-as if they were contributions? (Considering you’ve had one of the accounts for more than five years.)
The IRS does consider the TOTAL contributions across all Roth IRA accounts that you have. From the IRS stand point you have only one Roth IRA regardless of how many accounts you have have. The contributions come out first tax and penalty free but if you pull out all of the contributions and dip into the earnings then those will have a penalty prior to 59 1/2.
@@FinancialFastLane, so even if it’s technically the earnings in one account, it’s still considered contributions if you’ve contributed more than that amount in the other Roth IRA?
@@xxpowwowbluexx Yes, you only have one Roth IRA, even if you have 100 different Roth IRA accounts at 100 different custodians. The IRS says it is all one big Roth IRA.
I love to watch your videos. Very informative. What savings do you recommend for kids future/ education? Is there any good savings plan for kids? I am looking for the savings plan where we can use that money for kids needs in future but not only for their education.
Contact our office and we can setup a time to talk www.martinsenwealth.com
How long to have a Roth in order to take gains that are non taxed distributions, that i started at 65 years ?
What if the roth dollars were rolled over from a roth 401k. are the contributions able to be withdrawn?
If the IRS knows my Roth IRA buckets, how can I know the buckets too? Seems like Fidelity hides this info from me.
Fab video Lane, thanks much !! A clarifying question if I may, dealing with withdrawal of earnings. Noting that the order of withdrawals are contributions, conversions, and earnings. Example: let's say I'm 61. And I opened a contribution Roth IRA 11 years ago at age 50. And I then set up a Trad-to-Roth conversion IRA 3 years ago at age 58. According to what you said at minute 4:38, I can withdraw ALL of my Roth IRA funds, tax and penalty free (on the contribution, conversion, and earnings on both) because (a) I have met the 59 1/2 age rule (I'm 61), and (b) I've had "any" Roth IRA for 5 years (my contribution IRA = 11 years old). Regardless that my conversion IRA is only 3 years old. Is this correct? Cheers n crisps !!
Yes, you are correct! The only thing that still has a 5 year clock are any gains accumulated after a conversion. Every Roth conversion has a 5 year clock. All of the converted dollars can be accessed tax and penalty free but not the gains on those funds if they are invested and start to have new gains.
@@FinancialFastLane Thanks for the reply, Lane. Just after I posted my question to you, I actually found the answer on the website of Cornell Law School Legal Information Institute. What I stated above in my example is correct, that no taxes or penalties are due on any part of the distribution, whether contribution or conversion or earnings. This is so complicated, I've spent untold hours on this off and on, across many days months years, ugh. About your answer, you are of course correct on a separate 5 year clock for each conversion, but it doesn't apply to my example, and I haven't looked into it further to see when it would apply. It would be good to see an example problem though. And as you say, gains on converted funds may be assessed tax and penalties, but only if they are non-qualified distributions of earnings. Qualified distributions of earnings however are not subject to tax and penalties. And per my example, my distribution is 100% qualified: I am over 59 1/2 years old, and my first Roth was set up more than 5 years ago. The first Roth set up can be either a contribution or conversion, whichever is set up first then gives you the 5 year rule start date that applies to all current and future Roths. So for my example, the earnings of any future Roth conversions will be also be qualified and not subject to taxes or penalties, even if I hold them less than 5 years. I'll post the 2 websites I found in another post here below, without web links, so it won't be removed. There are multiple excellent sample problems to illustrate the tax code. I should also say, I read on one of these sites that IRS Publication 590-B is an summary of the IRS tax code regarding all this, and is not the code itself. It was written by someone trying to summarize the code, as a guide / for general information purposes only, which may not be the exact legal tax code. That's the first time I ever read anything like that about any IRS publication, will note it for future use, ha. To be continued below (or above?)...
@@F8NcH8Ng Sorry, your conclusion is not quite complete.There is more than one 5 year clock! You have satisfied one of them but every Roth conversation has it’s own 5 year clock.
@@FinancialFastLane OK, part 2, with the websites I found to explain all this. First up is an article titled "The Taxation of Roth IRA Distributions". This is by The FI Tax Guy, and I hope this can be found by doing a search for " fi tax guy the taxation of roth ira distributions " dated July 31, 2023. There is excellent info here with sample problems, and references to the Cornell Law School Legal Information Institute and their interpretation of the IRS tax code itself. Example problem #3 (about halfway down) is closest to my sample problem above. To find the Cornell site I mentioned, do a search for " cornell law school legal information institute 1.408A-6 " . The first article references the appropriate sections in the second. Thanks for your help !!
@@FinancialFastLane Just one last thing to tie up this loose end for any future readers. Yes, every Roth conversion has its own 5 year clock, but this rule only applies to "unqualified distributions". Thus if the distributions are "qualified", then this "every Roth conversion 5 year clock" rule goes away. "Qualified distributions" = your age > 59 1/2, AND you have held your first Roth IRA (by contribution or conversion) for at least 5 years; and thus all current and future Roth distributions are tax and penalty free, whether they consist of contributions, conversions, or earnings. And the same goes for any new Roth IRAs that you set up in the future, by contribution or conversion; no tax and no penalty, you are home free forever.
Or to phrase it another way, all these other confusing complicated beat-your-head-against-the-wall Roth distribution rules (5 years, taxes, penalties, contributions vs conversions vs earnings, withdrawal order of distributions) only apply to "unqualified distributions". Once you are "qualified", all these other rules go away.
Also keep in mind that all your Roth IRAs are considered by the IRS to be just one single big pot, no matter how many separate Roth accounts you have, at how many institutions. Also, a Roth “contribution” is defined by the IRS as either (a) a regular contribution or (b) a conversion contribution. This specific clarification unfortunately wasn't included in IRS Publication 590-B (which is a summary/guide of the tax code but is NOT the tax code itself); but it's in the tax code, the Cornell Law School writing of the tax code (mentioned above), the "fi tax guy" article (mentioned above), and in the Kitces blog article "Understanding The Two 5 Year Rules For Roth IRA Contributions and Conversions".
OK I'm worn out now, ha. Thanks Lane !!
THANK YOU! I finally understand!
Great video. Does the IRS consider Roth IRA and Roth 401k as two different things? They don’t pool those into one big bucket, do they?
401k’s and IRA’s are in separate buckets.
Great video! One question. I opened Roth 401k 6 years ago and Roth IRA 3 years ago. I am 60. If I roll the Roth 401K into the Roth IRA is withdrawing all the monies in the Roth IRA completely tax and penalty free? Or do need to wait 2 more years? Thanks!
@@carrie1359 It sounds like it would be all tax and penalty free. However, depends on how old your Roth IRA is (at least 5 years old) and also if there are any conversions done within the last 5 years.
@@FinancialFastLane My Roth 401K is 6 years old and my Roth IRA is 3 years old. There were no conversions done at all yet on any of my retirement accounts.Thanks!
@@carrie1359 You have to have a Roth IRA for at least five years for the gains to be tax-free. Contributions can be withdrawn all tax free, but you will not have tax free growth until after the Roth IRA is at least five years old.
I converted my 401k from a job I left and paid full taxes on it and got my Roth 401 from another job and transferred it all into my Roth IRA. Am I allowed to withdraw those conversions penalty free even though it has not been 5 years since the conversion and I am way under 59?
No you are not.
To be crystal clear, once the 5 Yr clock is satisfied on the initial Roth conversion for someone over 59 1/2, are all Roth dollars (conversion amount and earnings) available from that same anniversary date as the of the initial conversion? For example, Initial conversion in 2015, subsequent conversions in 2016, 2017 etc. Are all the converted amounts and earnings from all the subsequent years available tax free in 2020, or as I have also heard that there is a new 5 year period required for each conversion?
The day you reach 59.5 y/o, there are no more 5 year conversion wait rules. You are now considered qualified and everything in your Roth is available tax and penalty free......I think! I kept reading and learned that any earnings withdrawn even after 59.5, but prior to the 5 year wait period ending, the earnings for that one sub 5 year conversion would be taxed. Helps to keep reading!!!!!
Very nicely explained!
Forgive me if this is a silly question, but assuming I invested every dollar into my ROTH IRA, can I still withdraw up to the amount that I have contributed (ignoring the other clock rules)? What are the mechanics of that? Do I choose which investments to sell a portion of the withdraw the contribution?
The specific investment holdings within a Roth IRA are not taking into account, that doesn't matter. The total of all contributions can be withdrawan at any time tax and penalty free.
@@FinancialFastLane thank you!
lets say i roll over my roth 401k into a new roth IRA. This will be considered 'conversion" money. When do the taxes get paid for the gains + employer match contributions? At the time of rolling over the roth 401k into a roth ira, or at the time of withdrawling the conversion funds from the roth IRA?
The conversion would be added to your gross income for that year. You typically do not want to convert a full 401(k) all in one year. It’s much better to strategically do it in smaller chunks over several years.
@@FinancialFastLane thank you
Do I need to file any tax forms if I pulled out roth contributions only after 5 years but under 59 1/2 years of age? Thanks for input trying to figure out if I need to file anything on my yearly taxes
Nothing to file. Your custodian keeps track of contributions, withdrawals etc and if there is a taxable event they will report it to the IRS.
What about Roth IRA contributions that resulted from a rollover from a Roth 401k?
Rollovers are not considered contributions.
I just want to withdraw the money I contributed 12 years ago and walk away with the earnings keep earning until retirement. I can do that without penalties, right?
You can always withdraw total contributions tax and penalty free from a Roth IRA.
So for example if I invest $5000 into voo and it earns $3000 and I then take out my contribution of $5000 the $3000 will stay at $3000 until 59 1/2 correct?
That is correct!
What does Conversion dollar mean? Does this mean the dollar that was converted from a Traditional IRA to a Roth IRA?
Correct.
Thanks for the video, had a specific question regarding Roth 401k to Roth IRA rollovers:
My Roth 401k consists of Contributions and Earnings. If I retired very early and rolled that Roth 401k into my Roth IRA, would the rolled over money still be considered Contributions and Earnings when it rolls over into the Roth IRA? If so, wouldn't that technically mean that I am able to withdraw contributions from my Roth 401k early without penalty, by first moving it over into a Roth IRA (where the rules allow me to withdraw Contributions at any time tax + penalty free)?
Roth conversions have a 5 year rule, so if you are under age 59 1/2 you would have a penalty if you withdrew converted funds before the 5 years.
@@FinancialFastLane So money that is rolled over from a Roth 401k to Roth IRA is considered a conversion, not contributions + earnings?
Question. Do you need to sell your stocks on the roth ira first before you can withdraw them?
I try to withdraw as a sample but its zero in the withdrawable cash
Thank u so much
Yes, stocks must be sold and converted to cash in order to withdraw cash.
@@FinancialFastLane thank h
What happens if I have too many stocks instead of focusing on a few and sell the outliers
This question is impossible to answer in a comment. It depends on your age, goals, risk tolerance etc, which will be very different from person to person.
How about a video on SSDI regulations for people under age 65?
Thanks for a simple explanation. Im in my 60s and my etrade ira roth account gives me a option to click a button if i want to adjust a wash sale?? should i swith this on or not?
The wash sale has to do with capital gains taxes and only applies to non-qualified accounts. It would not apply to a Roth IRA.
Thank you. Is it 5 years from the date of conversion? Like u convert traditional IRA to ROTH IRA on January 10th 2020. Does it become tax free withdraw January 11th 2025 or after December, 31, 2025? Thx.
No it is not specific to a day only the year. So for example if you did a Roth conversion December 2nd of 2024 it is as if you did it on January 1st of 2024. So the 5 year clock is actually less than 5 years depending on when you do the conversion with in the year.
If I have full access - a long established IRA and over 60, may I BOTH contribute and withdraw from the account freely like it is a typical bank account of sorts? No rules on regular withdrawals or deposits (besides the annual deposit limits) or timing apply?
Yes, but only if you have "earned income". If you are not working then you cannot contribute.
Did NOT know the 5 year AND 59.5 rule. So recent earnings on my Roth at 70 years old are taxable??
The earnings are taxable only if you have withdrawan all of your contribution dollars and all of your coverted dollars and you also withdraw the earnings on converted dollars before the 5 year time frame was met. It's not a very likely scenario. It would mean that your Roth IRA is almost depleated.
If you convert 50% of your traditional IRA to a Roth
And pay your taxes. At conversion , is there any tax ramifications when withdrawing from your Roth after 5 years and if you’re over 59.5 years of age?
Or must you convert 100% of your traditional Ira to avoid taxation on Roth withdrawal?
You definitely do not need to convert the full IRA. Here is a video on the 5 year rules th-cam.com/video/Uyz4Wq12Me0/w-d-xo.htmlsi=UsTsoz6bVYT8t0qC
So I can put money in and let's say a emergency comes up in 1 year, I can pull that money out with 0 fees?
Yes, zero penalties and zero taxes.
Good day.
I have to withdraw money from IRA to pay for my college. I know that withdrawals from IRAs before age 59½ are subject to a 10% penalty. But if I use the withdrawals to pay for qualified education expenses (in this case, my college tuition), I may not have to pay this penalty. I have one other brokerage account too, so do I have to exhaust that first (plus any money in my bank account) prior to withdrawing money from my IRA account without being penalized? Or can I just leave my brokerage account alone and withdraw the IRA without being penalized using the criteria mentioned above?
Thank you.
You do not need to drain your other accounts. Here’s a video with the updated rules.
I understand that earning withdrawls will always be taxed before 59.5 but will there always be a penalty? I've had the account for 10 years (37 years old now). If I pull out my earnings will those be subject to the 10% penalty?
Yes if you pull out the earnings before 59 1/2 but all contributions can come out tax and penalty free at any time.
I'm getting close to 59 1/2... should I expect any push back from my financial advisor when I show up to withdrawal my IRA? Thanks!
I hope you are not planning to withdraw all of the funds in one year..? Roth funds are the most valuable because of the tax free growth. Maybe you are refering to a rollover and not a withdrawal?
This is very helpful, but I do have questions: If I am over 59 1/2, and I have invested all my Roth funds into stocks, which made me some earnings over the years. So are you saying for the portion of earnings that is made over the last five years, I won't be able to withdraw without getting penalized? Thanks.
How long ago did you first establish your Roth IRA account? If it is more than 5 years ago AND you are over 59 1/2 then everything will be tax free. If you first opened your Roth less than 5 years ago, then you would need to wait until 5 year for the gains to be tax free. Hope that helps!
@@FinancialFastLane I established my first Roth IRA in 1998 and am over 59-1/2. I started converting some traditional IRAs when I turned 60. Does that matter, or am I tax, penalty, and 5-year-rule-free when it comes to withdrawing any or all of my Roth? Can I stop creating separate Roth accounts to keep track of conversion clocks? Is the tax on distributions when I convert more traditional IRAs the only thing left to worry about?
@@generic_official Yes! Since you have had a Roth IRA for 5 years and you are over 59 ½, all Roth IRA dollars are immediately available tax and penalty free. This includes earnings on any converted dollars, even if the conversion was done recently, and on all future conversions. At this point, there are NO 5-year clocks to ever worry about. Everything is and will forever be tax-free. (As an aside, there is no need to establish different Roth IRA accounts for each conversion. IRS Form 5498 essentially “time stamps” each conversion, so all dollars can be commingled.)
Okay! So I'm 65 as of June this year. I have only a Roth account that I've had for twelve years. I have no conversions and have been contributing the max. every year. These contributions have bought stocks with high yeilds (TD Ameritrade) and collecting dividends that are reinvested. If I stop reinvesting the dividends turn in to cash in my Roth account. Am I aloud to just take a distribution of that cash every month or do I have to sell the stocks that the contributions bought in the first place? My goal is/was to retire and live off of the dividends produced by the stocks. Is that even possible? Thanks
Yea it is possible. I see no problem with doing that.
That bit about conversions was a surprise… sure enough, there’s no waiting period on conversions after 59-1/2.
There is a 5 year clock on every conversion regarding gains. When over 59 1/2 100% of coversions are available but for any new gains you would have to wait 5 years for those to be tax free.
@@FinancialFastLane tax would be paid on the full pre-tax contribution and its gains during the conversion, so it seems that only the post-conversion gains would be taxable (but not penalized) if the retiree dipped that far into the 3rd bucket and distributed earnings within the 5 years after conversion.
@@hornbaker That is correct as long as the person is over 59 1/2. If you are over 59 1/2 and you want tax free gains then you would have to wait to access the gains. If not then there the gains woud be taxed but no penalty because of age.
Is this the same for a ROTH 403B? If I have one and I have had another ROTH for more than 5 years, no problem withdrawing contributions from day one (yes and over 59.5 too) Obviously, the point is to put this money in and NOT take it out for a long time, but incase i needed to, I could. Thanks.
Generally speaking yes, but employer sponsored plans can have some unique rules set by the employer. Typically you can also do an in-service rollover to a Roth IRA when you’re over 59 1/2.
@@FinancialFastLane Thank you for the clarification.
I’m 26 turning 27 next month, I just graduated so I don’t have a job just yet but I do have savings. Would it be smart to make an initial deposit of $1000 into a Roth IRA then when I get a job I max it out yearly?
You are not eligible to make a Roth contribution until you have “earned income” .
I'm 31 and have had my Roth IRA for 7 years. If I withdrew earnings would they be taxed AND penalized even though I've had the account for over 5 years? I'm not going to withdraw anything, I'm just curious how it exactly works.
Yes, at your age, the earnings would be taxed and penalized.
Audio was very low, struggled to hear you with my volume all the way up
Sorry about that. I'm not sure what happened but will look into it. Thank you!
If I have a roth ira for over 5 years but just started maxing out contribution this year, is it penalty free if I start withdrawal in two years at age 60 retired?
Can I contribute towards previous years in ROTH IRA account? Considering I did not invest any at that point of time.
You can contiribute for a previous year up until tax day but nothing beyong that.
Well done, thank you.
ps - Youʻve won a new subscriber!
WELL DONE ....THANK you
So clear , thanks
Hello sir, im trying to plan an early retirement. Im curious if my understanding of your video is correct.
Let's say i contribute $300,000 into a roth ira over my life. Then i turn 49, i liquidate the assets within the roth but keep the money in the Roth account. I use the money to purchase high yielding dividend assets. Then, as those dividends are deposited into my brokerage account, i should be able to withdraw them up to the $300,000 limit right? Unless of course i hit age 59.5 before then.
Am i missing something hear or is my thinking correct?
I have the same question
If I did a Roth 401k rollover into a Roth IRA in 2023 can I pull out this money penalty free? I’m looking to buy a second home with the money.
If you are over age 59 1/2 then yes. Here is a video with the exceptions th-cam.com/video/BH140uZPxXo/w-d-xo.html
While "self directed Roth accounts" are beyond me, there is a way to buy real estate property and keep it in a Roth account. There are restrictions, like not living in it or allowing family to live in it for instance, but there are self directed Roth accounts out there. For me they're kinda complicated and the value of such an account holding would require an appraisal(annually???) Just something to maybe look into.
At what age do you have to cease contributing to your ROTH IRA?
When you no longer have "earned income". As long as you are working you can can contribute. There are no age limits.
What happens if I contribute $3000 and I lose $1000 of it. But then I make $1000 of gains back totaling my cash back to $3000. Would I be able to still pull $3000 without tax penalty or is that $1000 considered taxable gain?
Gains are tax free, however there could be some exceptions if one of the 5 year rules applies to you.
while it never happened to me, I pondered the same scenario. Hopefully you will have a long lifetime of contributions and/or conversions and not need to tap your retirement accounts. Good reason to think about having a separate emergency fund!
So would I face taxes and/or fees if I withdraw earnings pre 59 1/2 and post 5-year old IRA account?
There are no penalties and no taxes when withdrawing contributions of a Roth IRA. So, depending on how much you have contributed that total amount could be withdrawal tax and penalty, free at any age.
@@FinancialFastLane are earnings always taxed and feed pre 59 1/2?
Hi there. If I rolled a 401k to a Roth IRA is the whole amount considered a contribution or conversion? I paid takes on the rollover. Think it's a conversion, but just want to confirm. Thanks.
If you rolled a pre-tax 401k into an after tax Roth IRA that would be called an inflight Roth conversion. Usually that is not recommended as you are probably paying too much in taxes (depending upon the size of your 401k).
Thanks for the reply! Conversion it is. It went from a 401k to Traditional IRA to Roth IRA so taxes were what they needed to be. @@FinancialFastLane
Thank You Sir.
Nice work !
God bless you 💪🏼
I’m 63 yrs old unemployed and need to touch my Ira. What should I do to help with home improvement. ?
I only want to do a one time withdrawal at age 63. I’m retiring in twoyrs. What should I do?
We can’t give specific advice in the comments. You should consult a qualified financial advisor.
So I can take all of my money from my Roth IRA tax free ? What if I am collecting my SS at the same time?
Yes, withdrawals from Roth accounts are tax free and they have no negative impact on Social Security.
Thank you very much for the reply and advice
I have a roth 401K would it have same rules or different?
The withdrawal order rules would be the same but there are of course some other differences. Most people rollover their Roth 401k into a Roth IRA which is something you may want to consider.
Great information.
Great video
Thank you
I have a senarios if anyone can help me. I opened ROTH IRA in 2021 contributed 6k, in 2022 contributied 6k, and in 2023, so far, i have contributed $4,250. My account is showing gain of $995 from earning (on top of my contributions). This year i’m buying a house. Can i withdraw $16,250 that i had contributed without tax and penalty to put downpayment on my first house? I would appreciate if somoene could answer my question. Thank you.
I’ve the same question. My understanding is our contribution is always penalty free, no matter when we can withdraw but I want to make sure that’s accurate.
Wish I had watched this one sooner ;(
Bravo 🎉
Thanks
It’s way too complicated, hello canada tfsa, thank you tho