Can You Borrow From a Roth IRA? Withdrawals and 60-Day Rollovers

You cannot borrow from a Roth IRA. Federal tax law does not allow loans from any IRA, and any attempt to borrow against the account is treated as a taxable distribution of the entire balance. What you can do is withdraw the contributions you have already made, at any age and for any reason, without owing tax or a penalty. Getting at the earnings is harder, but several rules let you reach them early in specific situations.

Why Roth IRA Loans Are Not Allowed

Employer plans like 401(k)s let participants borrow against their balance. IRAs, including Roth IRAs, do not.¹ There is no legal way to draft a private loan agreement with yourself, set an interest rate, and pay the account back over time.

The consequences of trying are severe. If you borrow money from your Roth IRA or use the account to secure a loan, the IRS treats it as a prohibited transaction. The account loses its tax-advantaged status as of the first day of that tax year, and the entire fair market value of the assets is treated as distributed to you.² You would owe income tax on any earnings, a 10% early withdrawal penalty if you are under 59½, and you would permanently lose the future tax-free growth in that account.

Pledging works slightly differently. If you use only a portion of your Roth IRA as security for a loan, only that pledged portion is treated as distributed rather than the whole account.¹ The tax bill is smaller, but it is still a distribution, not a loan.

Withdrawing Your Contributions Anytime

The most useful thing to know about a Roth IRA is that your contributions come out freely. Because you funded the account with after-tax dollars, the IRS lets you pull those contributions back out at any age, for any reason, without taxes or penalties.

Federal law forces distributions to come out in a set order regardless of what you tell your custodian: regular contributions first, then conversion and rollover amounts, then earnings.³ Every dollar you have contributed over the years is available before you touch anything else. For someone with a long contribution history, that can be tens of thousands of dollars.

Once regular contributions are exhausted, the next layer is conversions and rollovers, taken on a first-in, first-out basis, with the taxable portion of each conversion coming out before the non-taxable portion.³ Watch the timing here: if you withdraw a conversion amount within five years of that specific conversion and you are under 59½, the taxable part may trigger the 10% early withdrawal penalty. Only after contributions and conversions are gone does a withdrawal reach earnings.

When You Can Withdraw Earnings Tax-Free

Earnings are the investment growth in the account, and they follow stricter rules. To take earnings out completely free of taxes and penalties, the distribution has to be “qualified,” which means two things must be true at the same time.

First, your Roth IRA has to satisfy the five-year holding period. The clock starts on January 1 of the tax year for which you made your first-ever Roth contribution. A contribution made for tax year 2022, for example, starts a clock that runs out on January 1, 2027.³ You satisfy this period once. It does not reset with new contributions or new accounts.

Second, one of these has to apply:

You are age 59½ or older.
You are totally and permanently disabled.
The withdrawal, up to a $10,000 lifetime limit, goes toward buying, building, or rebuilding a first home. If you and your spouse both qualify as first-time homebuyers, each of you can use up to $10,000.⁴
The distribution goes to a beneficiary after the account holder’s death.

Miss either half of that test and the earnings portion of your withdrawal is included in your taxable income and generally hit with the 10% early withdrawal penalty, unless one of the exceptions below applies.

Exceptions That Waive the 10% Penalty

Several situations let you take earnings early without the 10% penalty. Read this carefully: these exceptions waive the penalty only. You still owe income tax on the earnings portion unless the distribution is also qualified under the rules just above.

Unreimbursed medical expenses that exceed 7.5% of your adjusted gross income.
Health insurance premiums paid after you received at least 12 consecutive weeks of unemployment compensation.
Higher education expenses for you, your spouse, children, or grandchildren at an eligible institution, covering tuition, fees, books, and room and board.
Up to $10,000 lifetime for a first-time home purchase.
Substantially equal periodic payments based on your life expectancy, taken at least annually and continued for at least five years or until you reach 59½, whichever is longer.
Up to $5,000 per child within one year of a birth or finalized adoption. You can repay this to your Roth IRA within three years.⁴
Distributions taken because the IRS levied the account.
Up to $22,000 for qualified disaster recovery after a federally declared disaster.
For distributions after December 31, 2023, up to the lesser of $10,000 or 50% of your balance as a domestic abuse victim.
For distributions after December 31, 2023, one emergency personal expense per calendar year, up to the lesser of $1,000 or your vested balance above $1,000.
Distributions to a military reservist called to active duty for at least 180 days.

The full list, which also covers less common cases such as distributions to an alternate payee under a qualified domestic relations order, is maintained by the IRS.⁵

The 60-Day Rollover: The Closest Thing to a Loan

If what you really want is short-term access to cash and full repayment, the 60-day indirect rollover is the closest the tax code gets. You take a distribution from your Roth IRA, use the money for up to 60 days, and redeposit the full amount into a Roth IRA before the deadline. As long as the entire amount goes back in on time, the IRS does not treat it as a taxable event.⁶

The catch is the frequency limit. You are allowed only one indirect rollover across all of your IRAs in any 12-month period, and the limit runs across your total IRA holdings rather than account by account. A second indirect rollover within that window means the distribution is taxable and the redeposited amount is an excess contribution, hit with a 6% annual excise tax for every year it stays in the account.⁷

If You Miss the 60-Day Deadline

p>Missing the deadline turns the distribution into a permanent withdrawal, which can mean income tax on any earnings withdrawn plus the 10% early penalty. The IRS does allow self-certification of a late rollover if the delay was caused by one of a set of specific reasons, including a financial institution error, a distribution check that was misplaced and never cashed, funds deposited into an account you mistakenly believed was eligible, severe damage to your home, death or serious illness in your family, incarceration, postal error, or restrictions imposed by a foreign country.

To self-certify, you give the receiving IRA custodian a written statement using the model letter in IRS Revenue Procedure 2020-46, and you complete the rollover within 30 days of the reason no longer preventing you.⁸ Self-certification is not available if the IRS has already denied a waiver request for that same distribution.

How to Actually Take the Money Out

Withdrawals go through your account custodian. You fill out a withdrawal form, usually available online, that asks for your account number, the amount you want, and whether the distribution is qualified or non-qualified. That classification drives how the custodian handles withholding and reporting, so get it right.

Your custodian will also give you IRS Form W-4R, which sets federal income tax withholding on the distribution. For a standard Roth IRA withdrawal, the default withholding rate is 10%, and you can pick any rate from 0% to 100% by filing the form.⁹ If you are only withdrawing contributions, which are not taxable, 0% keeps the whole amount in your hands. Skip the form and the custodian withholds 10%.

Some custodians require a Medallion Signature Guarantee, a specialized verification from a bank or brokerage, before releasing large distributions. Electronic transfers usually clear within a few business days; paper checks take longer.

1
Internal Revenue Service. Retirement Plans FAQs Regarding Loans
2
Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts
3
Office of the Law Revision Counsel. 26 USC 408A Roth IRAs
4
Internal Revenue Service. Publication 590-B Distributions From Individual Retirement Arrangements (IRAs)
5
Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions
6
Office of the Law Revision Counsel. 26 USC 408 Individual Retirement Accounts
7
Office of the Law Revision Counsel. 26 USC 4973 Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities
8
Internal Revenue Service. Revenue Procedure 2020-46
9
Internal Revenue Service. Form W-4R Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions