A Roth IRA operates on two sets of rules: one for putting money in and one for taking it out. On the contribution side, you can add up to $7,500 a year ($8,600 if you’re 50 or older) for 2026, provided your income falls under the IRS thresholds, and you have until the April tax filing deadline to make a contribution for the prior year. On the withdrawal side, your original contributions can come out at any time, tax-free and penalty-free. Investment earnings follow a stricter path: they only escape tax and penalty once you’re at least 59½ and your first Roth IRA has been open for at least five tax years. The Roth IRA contribution and withdrawal rules below walk through each piece of that framework.
Who Can Contribute and How Much
Direct contributions are limited by your modified adjusted gross income. For 2026, single filers can contribute the full amount below $153,000 in MAGI, with a phase-out running from $153,000 to $168,000 and no direct contribution allowed at $168,000 or above. Married couples filing jointly get the full contribution below $242,000, phase out between $242,000 and $252,000, and lose eligibility entirely at $252,000.
If you qualify, the 2026 annual contribution limit is $7,500 under age 50 and $8,600 at age 50 or older.1Internal Revenue Service. Retirement Topics – IRA Contribution Limits That cap is combined across all your traditional and Roth IRAs, not per account. You also can’t contribute more than your taxable compensation for the year. Earn $5,000 and that’s your ceiling, regardless of the statutory limit.
The window for making a contribution runs from January 1 of the tax year through the tax filing deadline the following April, typically April 15.2Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs A February 2027 deposit can still count toward your 2026 limit if you tell your custodian to apply it to the prior year. Most custodians default to the current year if you don’t specify.
Earners above the income limits often use a workaround called the backdoor Roth: contribute to a traditional IRA (which has no income cap for nondeductible contributions), then convert those funds to a Roth. It’s legal, but if you hold pre-tax money in any traditional, SEP, or SIMPLE IRA, a pro-rata rule makes part of the conversion taxable. Each conversion also starts its own separate five-year clock, discussed below.
Overshooting the annual limit triggers a 6% excise tax on the excess for every year it stays in the account.3Office of the Law Revision Counsel. 26 USC 4973 – Tax on Excess Contributions to Certain Tax-Favored Accounts and Annuities You can fix it by withdrawing the excess plus any earnings on it before your filing deadline, including extensions.
How Withdrawals Are Ordered
You don’t get to choose which dollars come out of your Roth IRA first. The IRS applies a mandatory ordering sequence to every distribution:4Internal Revenue Service. Publication 590-B, Distributions From Individual Retirement Arrangements
- Regular contributions come out first, always tax-free and penalty-free because you already paid tax on that money.
- Conversions and rollovers come out next, oldest first. Within each conversion, the taxable portion is treated as withdrawn before the nontaxable portion.
- Earnings come out last. This is the only layer that can trigger income tax or a penalty.
The practical effect is generous. If you’ve contributed $50,000 over the years and the account is worth $70,000, you can pull out up to $50,000 at any age and at any time, without tax or penalty. The five-year rules and age thresholds only matter once withdrawals reach into the earnings layer.
The Five-Year Rule for Earnings
Earnings are only tax-free once they’ve cleared a five-taxable-year holding period that starts on January 1 of the tax year for which you made your first-ever Roth IRA contribution.2Office of the Law Revision Counsel. 26 USC 408A – Roth IRAs The January 1 start date is favorable: open your first Roth in December 2026 and designate the deposit as a 2026 contribution, and the clock is considered to have started January 1, 2026. Five years is up on January 1, 2031.
Once satisfied, this clock never resets. Open another Roth IRA a decade later and the earnings in the new account are already past the five-year mark, because the clock attaches to you, not to each account.
The five-year rule alone doesn’t make earnings tax-free. You also need a qualifying event. The most common is reaching age 59½. A withdrawal that meets both conditions is a “qualified distribution” and is fully excluded from gross income. Three other qualifying events also unlock tax-free earnings once the five-year rule is satisfied:
- Total and permanent disability, as defined by the tax code.
- Death (distributions to your beneficiary or estate).
- First-time home purchase, capped at $10,000 in earnings over your lifetime, with “first-time” meaning you haven’t owned a principal residence in the past two years.
A frequent misconception is that turning 59½ automatically makes everything tax-free. If you opened your first Roth at 58 and start withdrawing earnings at 59½, the five-year rule hasn’t been met yet. Those earnings avoid the 10% penalty because of your age but still get taxed as income until the five-year clock expires. Opening a Roth IRA early, even with a token contribution, is the simplest way to sidestep this problem.
The Separate Five-Year Rule for Conversions
Money converted from a traditional IRA or 401(k) into a Roth IRA starts its own five-year clock, tracked independently from the earnings clock and independently for each conversion. The rule exists to stop people from moving pre-tax money into a Roth and immediately pulling it out to avoid the 10% early withdrawal penalty.
The conversion clock also starts on January 1 of the year you made the conversion. If you convert in November 2026, the waiting period ends January 1, 2031. Withdraw the converted amount before then and before age 59½, and you owe a 10% penalty on the taxable portion of that conversion.5Internal Revenue Service. Topic No 557, Additional Tax on Early Distributions From Traditional and Roth IRAs Once you’re 59½, the conversion clock stops mattering, because your age eliminates the penalty on its own.
Multiple conversions across different years are tracked separately, first in, first out. A 2024 conversion and a 2027 conversion have different expiration dates. Keeping a simple record of each conversion’s date and amount avoids confusion at withdrawal time.
Early Withdrawals and Penalty Exceptions
If you tap earnings before 59½ without meeting the five-year rule, you generally owe income tax on those earnings plus a 10% early withdrawal penalty. The IRS waives the 10% penalty (but not the income tax on earnings) in a number of specific situations:5Internal Revenue Service. Topic No 557, Additional Tax on Early Distributions From Traditional and Roth IRAs
- Unreimbursed medical expenses exceeding a percentage of your adjusted gross income.
- Health insurance premiums paid while receiving unemployment compensation.
- Total and permanent disability.
- Terminal illness.
- Qualified higher education expenses for you, your spouse, children, or grandchildren.
- First-time home purchase, up to $10,000.
- Substantially equal periodic payments taken over your life expectancy.
- An IRS levy on the account.
- Qualified reservist distributions.
- Qualified birth or adoption expenses, up to $5,000.
- Domestic abuse victims, for distributions made after December 31, 2023.
- Federally declared disaster losses.
- Personal or family emergency expenses, for distributions made after December 31, 2023.
Remember the ordering rule. In most early-withdrawal scenarios you’ll deplete your contribution basis long before reaching any earnings, so these exceptions only come into play once you’ve already pulled out everything you originally put in.
No Required Minimum Distributions
Unlike traditional IRAs, Roth IRAs have no required minimum distributions during the owner’s lifetime.6Internal Revenue Service. Retirement Topics – Required Minimum Distributions Traditional IRA owners have to start drawing down at age 73, whether they need the money or not. Roth owners don’t. Once past 59½ with the five-year rule satisfied, you can withdraw everything at once, take it in pieces, or leave it alone indefinitely.
Inherited Roth IRAs
A Roth IRA doesn’t disappear at death, but the rules a beneficiary follows differ from the ones the original owner did.
The five-year clock carries over. If the original owner had the Roth IRA at least five tax years before dying, earnings come out tax-free to the beneficiary. If the owner hadn’t met the five-year mark, earnings withdrawn before it expires are taxable.7Internal Revenue Service. Retirement Topics – Beneficiary
For deaths in 2020 or later, most non-spouse beneficiaries fall into the “designated beneficiary” category and must empty the entire account by the end of the 10th year after the year of death. A narrower group called “eligible designated beneficiaries,” which includes surviving spouses, minor children of the deceased, disabled individuals, and certain others, can stretch distributions over their own life expectancy. A surviving spouse also has the option to treat the inherited Roth IRA as their own, which restores the no-RMD advantage.