Withdrawals between ages 59½ & 73*
Restrictions relax at age 59½, and you can withdraw from a Roth or traditional IRA penalty-free.
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 73*
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 RMD age. 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.
SELF-EMPLOYED OR OWN A SMALL BUSINESS?
You may be able to save even more with a SEP-IRA or SIMPLE IRA.
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 if the original account owner held the IRA for at least 5 years.
But you will pay taxes on withdrawals from an inherited traditional IRA.
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 a "tax-free rollover" if 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. Taxes will be withheld from the distribution from your traditional IRA, so you’ll have to use other funds to roll over the full amount of the distribution.
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