📋There are three ways to contribute to a Roth IRA: regular contributions, conversions, and earnings.
📅The Five-Year rule determines whether the withdrawal of earnings is subject to tax.
💰Contributions can always be withdrawn penalty and tax-free, but earnings may be subject to tax if not qualified.
💡Being 59 ½ or older does not automatically satisfy the Five-Year rule.
📊The IRS treats all your Roth IRAs as one, making it easier to satisfy the Five-Year rule.
What are the three ways to contribute to a Roth IRA?
—The three ways to contribute to a Roth IRA are regular contributions, conversions from a traditional IRA, and earnings on your investments.
What is the Five-Year rule?
—The Five-Year rule determines whether the withdrawal of earnings from a Roth IRA is subject to tax.
Can I withdraw my contributions from a Roth IRA tax-free?
—Yes, contributions can always be withdrawn from a Roth IRA tax-free.
Does being 59 ½ or older mean I satisfy the Five-Year rule?
—No, being 59 ½ or older does not automatically satisfy the Five-Year rule.
How does the IRS treat multiple Roth IRAs?
—The IRS treats all your Roth IRAs as one, making it easier to satisfy the Five-Year rule.
00:00A Roth IRA is a way to save for retirement with unique tax advantages.
05:36There are three ways to contribute to a Roth IRA: regular contributions, conversions, and earnings on investments.
09:29The Five-Year rule determines whether the withdrawal of earnings from a Roth IRA is subject to tax.
11:14Contributions can always be withdrawn tax-free, but earnings may be subject to tax if not qualified.
12:50Being 59 ½ or older does not automatically satisfy the Five-Year rule.
15:10The IRS treats all your Roth IRAs as one, making it easier to satisfy the Five-Year rule.
