How Can I Withdraw Money from My Roth IRA?
Money contributed
to your Roth IRA may be withdrawn tax-free at any time. In addition, you can
withdraw investment earnings
tax-free if
they are a "qualified distribution."
A qualified distribution meets the following
requirements:
- You have
reached age 59 ½.
- You are
disabled.
- You are the
beneficiary of a deceased IRA owner.
- You use the
distribution to pay certain qualified first-time homebuyer amounts.
- You have
significant unreimbursed medical expenses.
- You are
paying medical insurance premiums after losing your job.
- The
distributions are not more than your qualified higher education expenses.
- The
distribution is due to an IRS levy of the qualified plan.
- You withdraw money in a series of
“substantially equal period payments” based on your life expectancy.
Please consult your tax advisor or visit the IRS website at www.irs.gov
for details on this method.
Are Federal Income
Taxes Withheld from My Distributions?
The tax code requires that you make a choice concerning the distributions you
receive from your Roth IRA. The law requires that federal income tax be
withheld from all Roth IRA distributions (other than certain distributions of
excess contributions and certain qualified distributions), unless you tell us
that you do not want any taxes withheld. If you choose to have taxes withheld,
they will be withheld at a flat rate of 10% of the amount of each distribution
and turned over to the government as a prepayment of your federal income tax
liability for the year the distribution is made.
Could My
Withdrawals Be Taxed If I Have a Roth Conversion IRA?
If you converted a Traditional IRA to a Roth IRA and withdrew money less
than five years after making the conversion, you may be subject to a 10% IRS
penalty on a portion of the withdrawal. For tax purposes, all of your Roth IRAs
— both regular and conversion Roth IRAs, and Roth IRAs held at different mutual
fund companies — are considered as one single account.
If one or more of your Roth IRAs does not qualify for tax-free
treatment, you must take the withdrawals in the following order:
- Withdrawals
of contributions to regular (contributory) Roth IRAs
- Withdrawals
of conversion contributions on a first-in, first-out basis
- Withdrawals
of all earnings
For further details, please see pages 19-21 in our IRA
Disclosure Booklet.
Your personal financial situation may differ, or present exceptions to
some of the rules outlined here. You may wish to consult a financial advisor.
You may also want to read IRS Publication 590 “Individual Retirement
Arrangements (IRAs)” available at www.irs.gov or by
calling the IRS at 1-800-TAX-FORM
(1-800-829-3676).
All examples provided are for illustrative purposes only. If your company offers a SEP or SIMPLE retirement plan, call 1-800-582-6757 to ask how to add the Domini
Social Equity Fund, Domini European Social Equity Fund, or Domini Social Bond
Fund to your plan.
The Domini Funds are subject to market fluctuations and are not insured.
You may lose money. Although the Domini Funds are no load, certain fees and
expenses apply to a continued investment that are described in the Prospectus.
There is, for example, an annual $10 maintenance fee for IRA accounts.
