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Posted: 11/25/2003 4:08:06 AM EDT
Anyone know what the penalty is for early withdraw of Roth IRA? I may or may not have a job soon, and if worse comes to worse, I might have to do that.
Link Posted: 11/25/2003 4:51:27 AM EDT
I think it's pretty bad. You'll have to pay a 10% 'penalty' on top of the money being treated as 'income' and taxed accordingly. I don't know about state taxes.
Link Posted: 11/25/2003 5:27:11 AM EDT
Is the IRA less than 5 years old? If so there's no penalty.
Link Posted: 11/25/2003 6:04:42 AM EDT
Originally Posted By METT-T: Is the IRA less than 5 years old? If so there's no penalty.
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Does this apply to all IRAs or just Roth IRAs?
Link Posted: 11/25/2003 7:55:09 AM EDT
When do I pay income tax on a Roth IRA? Per Vanguard's Website [url=http://www.vanguard.com/VGApp/hnw/PersonalHome]Vanguard Website[/url] and a search on 'withdraw ROTH" "Never—if you wait to withdraw investment earnings until after you turn age 59½ and you’ve owned a Roth IRA for the required 5-year minimum holding period. You can withdraw your contributions tax-free at any time. But if you withdraw earnings before you reach age 59½ or you haven’t met the required minimum holding period, then you’ll have to pay income tax and usually a 10% federal penalty tax. (The penalty doesn't apply if you become disabled or if you die and the withdrawal goes to your estate or beneficiary.)"
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