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Taking Distributions From a Roth IRA

Time to enjoy retirement – Remember…first in, first out

When taking a distribution from a Roth IRA, the money comes out on a “first in, first out” basis.

Here is the order in which Roth IRA money is distributed:

  • Annual contributions
  • Conversions and retirement plan rollovers (by year)
  • Earnings

The rhyme & reason of correct distribution practices

So why is this important?  Because your annual contributions have already been taxed, so since they come out first, you may be able to take them out early, tax and penalty free.

If you have any questions, please be sure to speak with a CPA or tax professional.

 

Terry White

About Terry White

I started my business career after getting my degree in Accounting from the University of New Mexico in 1983. My first job was as a controller for a local title company, and in 1987 I started First Financial Escrow, Inc. Over the years I played a part in several startup companies including First Financial Equities, Inc., First Financial Trust, Inc., First Financial Marketing, Inc. and Asset Ventures, Inc. In 1997 First Financial Escrow, Inc. was able to purchase the escrow accounts from Sunwest Bank and changed its name to Sunwest Escrow. As the market changes, Sunwest has grown and changed along with it. Besides my wife, Sheila, we have three boys, two daughters-in-law, one grandson, another grandson on the way and a future daughter-in-law. Sunwest is my passion, and I enjoy coming to work every day to see what will happen next. I enjoy fly fishing, spending time in Colorado, biking and watching my boys play soccer.