Living in retirement
IRA rules for RMDs & other withdrawals
While you can take money from your IRA anytime, you may bypass penalties and extra taxes if you don't do it too early.
Guidelines for withdrawals
Withdrawals before age 59½
Withdrawals of Roth IRA contributions are always both tax-free and penalty-free. But if you're under age 59½ and your withdrawal dips into your earnings—in other words, if you withdraw more than you've contributed in total—you could be subject to both taxes and penalties on the earnings portion of the withdrawal.
Withdrawals of your traditional IRA contributions before age 59½ will result in a 10% federal penalty tax plus regular income tax on the taxable amount of your withdrawal—generally the entire amount—unless you qualify for an exception.
See if you qualify for an exception
Withdrawals between ages 59½ & 72 (age 70½ if you attained age 70½ before 2020)
Restrictions relax at age 59½, and you can withdraw from a Roth or traditional IRA penalty-free for the most part.
In addition, with a Roth IRA, you'll pay no taxes on withdrawals, provided your account has been open for at least 5 years.*
With a traditional IRA, you'll owe taxes on the withdrawals of all earnings and any contributions you originally deducted from your taxes.
But remember: Turning 59½ doesn't mean you have to start withdrawing your money.
Withdrawals at age 72 (age 70½ if you attained age 70½ before 2020) & older
If you own a Roth IRA, there's no mandatory withdrawal at any age.
But if you own a traditional IRA, you must take your first required minimum distribution (RMD) by April 1 of the year following the year you reach age 72 (age 70½ if you attained age 70½ before 2020). For each subsequent year, you must take your RMD by December 31. The RMD amount is based on your life expectancy and the prior year-end balance of your retirement account.
Learn about Vanguard's free RMD Service
Withdrawals from an inherited IRA
In general, nonspouse beneficiaries that inherit an IRA from someone that passed away in 2020 or later may be required to withdraw the entire account balance within 10 years. Spousal beneficiaries and certain eligible nonspouse beneficiaries may be permitted to take RMDs over their life expectancy.
You won't pay taxes on withdrawals from an inherited Roth IRA as long as the original account owner held the IRA for at least 5 years.
But you will pay taxes on withdrawals from an inherited traditional IRA.
Learn more about inherited IRAs
Learn more about RMD rules for inherited IRAs
A word about loans from your IRA
Neither Roth nor traditional IRAs allow you to take loans, but you can access money from an IRA for a 60-day period through what's termed a "tax-free rollover" as long as you put the money back into the same or a different IRA within 60 days. You're limited to only one such "rollover" within a 12-month period, regardless of the number of IRAs you own.
Learn more about "tax-free rollovers"
We're here to help
Have questions? Contact us.
Open your IRA today
Open your IRA today
*The 5-year holding period for Roth IRAs starts on the earlier of: (1) the date you first contributed directly to the IRA, (2) the date you rolled over a Roth 401(k) or Roth 403(b) to the Roth IRA, or (3) the date you converted a traditional IRA to the Roth IRA. If you're under age 59½ and you have one Roth IRA that holds proceeds from multiple conversions, you're required to keep track of the 5-year holding period for each conversion separately.
You may wish to consult a tax advisor about your situation.
All investing is subject to risk, including the possible loss of money you invest.
To discourage the use of IRA distributions for purposes other than retirement, you'll be assessed a 10% additional tax on early distributions from traditional and Roth IRAs, unless an exception applies. Generally, early distributions are those you receive from an IRA before reaching age 59½. The 10% additional tax applies to the part of the distribution that you have to include in gross income. It's in addition to any regular income
tax on that amount. Distributions that you roll over or transfer to another IRA or qualified retirement plan aren't subject to this 10% additional tax. This is true as long as you follow the one IRA-to-IRA rollover per year rule. For more information on rollovers, refer to
Topic No. 413, Rollovers from Retirement Plans and visit
Do I Need to Report the Transfer or Rollover of an IRA or Retirement Plan on My Tax Return? Exceptions to the 10% additional
tax apply to an early distribution from a traditional or Roth IRA that is: Refer to
Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs) for more information on these exceptions and on IRA distributions generally. Other exceptions apply to distributions
from other qualified employee retirement plans. For information on these exceptions, refer to Topic No. 558 or
Publication 575, Pension and Annuity Income. The 10% additional tax is reported on
Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts and
Schedule 2 (Form 1040), Additional Taxes PDFPDF. However, you don't have to file Form 5329 if your
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. shows distribution code 1 in Box 7. In this
instance, you need only enter the 10% additional tax directly on Schedule 2 (Form 1040). If you qualify for one of the exceptions to the 10% additional tax, but your Form 1099-R doesn't have a distribution code 2, 3, or 4 in the box labeled "distribution code(s)," or if the code shown is incorrect, you must file Form 5329 and Schedule 2 to claim the exception. Federal income tax withholding is required for distributions from IRAs unless you elect
out of withholding on the distribution. If you elect out of withholding, you may have to make estimated tax payments. For more information on withholding and estimated tax payments, refer to Publication 505, Tax Withholding and Estimated Tax.Exceptions to the 10% Additional Tax
Reporting the 10% Additional Tax
Tax Withholding and Estimated Tax