Cashing out a Roth IRA penalty???

Home ▸ Archive ▸ Serious Business ▸ Cashing out a Roth IRA penalty???
O

ott75

Junior Member

20 posts
Mar 20, 2010 10:00 AM
Anyone know right off the top what is going to be my penalty?
Mar 20, 2010 10:00am
thePITman's avatar

thePITman

Senior Member

3,867 posts
Mar 20, 2010 10:56 AM
If you are cashing out less than what you have invested, there is no penalty. There is only a penalty if you have made a profit and will be cashing out all of what you invested PLUS some of that profit.
Mar 20, 2010 10:56am
T

tigerballonline

www.advorunners.com

125 posts
Mar 20, 2010 11:18 AM
You will also pay 20% federal tax
Mar 20, 2010 11:18am
O

ott75

Junior Member

20 posts
Mar 20, 2010 11:47 AM
So if I invested 1000 and have made 300 profit, I can take out the 1000 with what expectation of penalty?
Mar 20, 2010 11:47am
E

eersandbeers

Senior Member

1,071 posts
Mar 20, 2010 1:02 PM
tigerballonline wrote: You will also pay 20% federal tax
Shouldn't on a Roth. You paid taxes before the money went in.


It also depends on the reason you are taking the money out. Most financial firms have some type of hardship clause that will allow you to take out your money without penalty.
Mar 20, 2010 1:02pm
C

Con_Alma

Senior Member

12,198 posts
Mar 20, 2010 1:50 PM
ott75 wrote: So if I invested 1000 and have made 300 profit, I can take out the 1000 with what expectation of penalty?

That's correct. You have already paid tax on your principle and may withdraw it at any time. You may not withdraw the earnings for a period of 5 years and age 59 1/2.
Mar 20, 2010 1:50pm
T

tigerballonline

www.advorunners.com

125 posts
Mar 22, 2010 12:25 AM
My bad, I did not know that about a roth IRA. I knwo I just received my profit sharing check from my last job, and I would pay out 30% if I withdrew any money.
Mar 22, 2010 12:25am