Things you may not know about a Roth IRA #wealthbuilding #investing

To withdraw earnings (gains) from a Roth IRA tax-free, you must meet two conditions: 1. The 5-Year Rule – The Roth IRA must have been open for at least five years. The five-year clock starts on January 1 of the year you made your first contribution. 2. You Must Be at Least 59½ Years Old – If you withdraw earnings before this age, they will be subject to income tax and possibly a 10% early withdrawal penalty unless an exception applies. Exceptions to the Early Withdrawal Penalty (But Not Always Tax-Free) Even if you haven’t met both conditions, you may be able to withdraw earnings without the 10% penalty (but still owe taxes) if you use the money for: • First-time home purchase (up to $10,000 lifetime limit) • Qualified education expenses • Birth or adoption expenses (up to $5,000) • Unreimbursed medical expenses (if they exceed 7.5% of your adjusted gross income) • Disability • Health insurance premiums (if unemployed) If you don’t meet both the 5-year rule and the age requirement, your earnings may be taxed and penalized unless one of the exceptions applies. #savingmoney #budgetingtips #debtfreejourney #wealthbuilding