Posted: 10/30/2012 6:42:01 PM EDT
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SD Crew,
I've got a Roth IRA. To my understanding I can take out everything that I have deposited summing all of the years of deposit, without penalty. Anything that is over my deposited amount that is withdrawn will be penalized for windrawing. So, If I've put in 5K for 10 years and the IRA, through gains and dividends is worth 75K, I can sell 50K worth of stock and then withdraw that amount without penalty? Am I understanding it correctly? I've been good at picking stocks and never thought I'd withdraw before retirement, hence my naivety. I simply don;t trust stocks with the amoun t of debt/inflation we have in the US, but that's for another thread... Thanks in advance. |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules.
http://www.irs.gov/pub/irs-pdf/p590.pdf |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? |
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OP, may I ask what you're trying to accomplish? Do you need the cash now, or are you trying to protect your investment? I'm looking to hedge bets and diversify into physical metals ownership. I can keep 50% of my current IRA funds as they are gains from dividends and stock growth. I'm looking to take out what I have principally put in without penalty. Am I understanding my Roth correctly in the original post? |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? Yes. Check the index- Roth starts at page 54 or 55. |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? Yes. Check the index- Roth starts at page 54 or 55. You can withdraw your Roth IRA contributions at any time without tax or penalty. Qualified distributions are where the funds being withdrawn are allocable to earnings and may be made without tax or penalty because certain conditions are met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). Unqualified distributions are where the funds being withcrawn are allocable to earnings and are subject to tax and penalty certain conditions are not met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). |
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You can withdraw your Roth IRA contributions at any time without tax or penalty.
Qualified distributions are where the funds being withdrawn are allocable to earnings and may be made without tax or penalty because certain conditions are met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). Unqualified distributions are where the funds being withcrawn are allocable to earnings and are subject to tax and penalty certain conditions are not met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). The above is accurate. Roth contributions are post tax dollars....you have already paid taxes on those monies, hence you can withdraw contributions without penalty. OP if your plan allows it have you considered metal ETFs that maintain physical metal for the investors? The reason that I mention this is that by keeping your money in the Roth and investing in said ETFs you maintain the tax advantages associated with keeping the monies in the Roth. You also used the term "hedge" which I take to mean that you have the normal concerns of runaway inflation due to fiat currency, etc...if that's your primary concern I see no reason to take possession of the metals though I do agree that you want your money associated with a physical amount. Also, by withdrawing the contributions from your Roth you're opening yourself up to an IRS microscope as all of this has to be noted when you file. Just something tho think about. |
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You can withdraw your Roth IRA contributions at any time without tax or penalty.
Qualified distributions are where the funds being withdrawn are allocable to earnings and may be made without tax or penalty because certain conditions are met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). Unqualified distributions are where the funds being withcrawn are allocable to earnings and are subject to tax and penalty certain conditions are not met (At least 5 years since conversion or rollover, age 59.5, disabled, buying a home, etc). The above is accurate. Roth contributions are post tax dollars....you have already paid taxes on those monies, hence you can withdraw contributions without penalty. OP if your plan allows it have you considered metal ETFs that maintain physical metal for the investors? The reason that I mention this is that by keeping your money in the Roth and investing in said ETFs you maintain the tax advantages associated with keeping the monies in the Roth. You also used the term "hedge" which I take to mean that you have the normal concerns of runaway inflation due to fiat currency, etc...if that's your primary concern I see no reason to take possession of the metals though I do agree that you want your money associated with a physical amount. Also, by withdrawing the contributions from your Roth you're opening yourself up to an IRS microscope as all of this has to be noted when you file. Just something tho think about. I don't trust there is a physical backing of resource to the ETF's, and any real meltdown causing a lockdown will prevent me from accessing anything other than what is in my physical possession, hence the avoidance of an ETF. |
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You can own real estate with your Roth. Have you looked into that? It's a hard asset. All income and all expenses on said real estate have to be paid out of and to the Roth account, but it's immune from lawsuit (as a landowner this is huge if someone trespasses and gets hurt).
Might be something to look into. There are 3 banks that do it currently, mine is through EquityTtrust out of Elyria Ohio. |
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I don't trust there is a physical backing of resource to the ETF's, and any real meltdown causing a lockdown will prevent me from accessing anything other than what is in my physical possession, hence the avoidance of an ETF.
Of course and that seems to be a common perception. The question that you have to answer for yourself is simply one of cost/benefit analysis. Do you believe that the risk of a enduring, not temporary, melt down is such that you will need significant tangible assets? This is an important critical component of the logic train as your decision to essentially dissolve your Roth IRA will have a significant impact on that vehicle in the conventional sense of tax exempt compounding interest. I would suggest that you also ponder orders of effect of common "meltdowns" and subsequent "lockdowns" that might require you to have precious materials on hand. For example if the banking/investment system essentially is unable to function for long periods what other social factors will be in play? Will precious metal be the commodity that is most valuable to you. These aren't rhetorical questions and only you can answer these for yourself. Personally I believe keeping some cash readily available as well as some negotiable materials such as precious metals is prudent though I don't see the need to keep a significant amount of my wealth in metals or other commodities. My current allocation in metals is about 5%. It's all about your perception of risk and what makes you comfortable based on your personal situation. Don't be emotional...just ponder facts and degrees of likelihood. I think you'll find a solution that works well for you. You can own real estate with your Roth
Good point. |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? Yes. Check the index- Roth starts at page 54 or 55. Check page 62, left collumn, middle of the page. Withdrawal of contributions are generally not included in your gross income. To the OP are your sure you want to withdraw money from stocks at a relative low, and place into PMs, at a relative high. Selling low and buying high is rarely a good move. |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? Yes. Check the index- Roth starts at page 54 or 55. Check page 62, left collumn, middle of the page. Withdrawal of contributions are generally not included in your gross income. To the OP are your sure you want to withdraw money from stocks at a relative low, and place into PMs, at a relative high. Selling low and buying high is rarely a good move. I'm looking at the financial situation of our country, I guess. We have unprecedented debt with the Feds thinking printing more money is the answer. I don't think our dollar or corporate profits, even in international businesses, will matter given the dependency of all markets to the US. Metals may be at a high, but I think they're safer than our currency. And, metals are just a transition to where food, water, shelter and ammo reign. I'm not sure we get back out to where the silver/gold matter post that situation... Back to the simplicity of the initial post...am I correct that I do not have to wait 5 years to withdraw contributions made thus far? ETA: Looks like i have to show earnings on contributions for eah year I decide to withdraw a contribution? |
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Pretty sure that as long as you don't withdraw more $ than you put in as direct contributions, you're safe.
Also, expect interest rates to spike when Bernanke steps down to put the brakes on our hyperinflation. Having real estate to rent while people can't afford to purchase homes in your Roth wouldn't hurt. You can even be a private mortgage holder. |
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there are only a few things you withdraw the money for without penalty i believe. Once you hit 59.5, you can start taking tax free disbursements, assuming you've had the money in there for 5 years. At least I think that's correct... Here is the IRS publication with all the rules. http://www.irs.gov/pub/irs-pdf/p590.pdf for a Roth? Yes. Check the index- Roth starts at page 54 or 55. Check page 62, left collumn, middle of the page. Withdrawal of contributions are generally not included in your gross income. To the OP are your sure you want to withdraw money from stocks at a relative low, and place into PMs, at a relative high. Selling low and buying high is rarely a good move. I'm looking at the financial situation of our country, I guess. We have unprecedented debt with the Feds thinking printing more money is the answer. I don't think our dollar or corporate profits, even in international businesses, will matter given the dependency of all markets to the US. Metals may be at a high, but I think they're safer than our currency. And, metals are just a transition to where food, water, shelter and ammo reign. I'm not sure we get back out to where the silver/gold matter post that situation... Back to the simplicity of the initial post...am I correct that I do not have to wait 5 years to withdraw contributions made thus far? ETA: Looks like i have to show earnings on contributions for each year I decide to withdraw a contribution? NO to the last sentence. You can withdraw contributions at any time (note we are talking contributions, not rollover ammounts). The 5 year limit is when you are withdrawing earnings. You may be getting tripped up because this is a nonqualified distribution- thats fine because it is also non taxable. There is a 10% penality on the taxable portion of nonqualified distributions. Again, not a problem because the taxable portion is zero. Don't take my work for it, print out the section on IRAs in the doccument above and pretend you are doing your 2012 taxes. Remember stocks are not directly affected by a drop in the value of the dollar. In otherwards, stocks can actually be a good investiment durign inflation. Now if the economy tanks, US stocks will loose value because their market has less spending power. Companies with debt might actually benefit from inflation (ie electrical utilities). Howard Ruff, the gold bug during the 70s, recomended stocks as an investiment to preserve purchasing power. Not that I have any particular fondness for Mr Ruff, I'm just citing him as one of the leading proponents of PM's |