Question

What is the maximum amount of a Roth IRA early

Answer 1

What is ROTH IRA?

Roth IRA (Individual Retirement Account) is a Tax Advantaged retirement Plan in United States. However contributions made to IRA are not Tax free ie when you contribute to these plan, Tax shall be paid on your income without deducting such amount like under Traditional IRA's.

Early Redemption from ROTH IRA

As told above, contributions are not tax free ie Tax is paid on such contributions, hence their withdrawals are tax free provided certain conditions are met.

1. Withdrawal must be taken after five years or more after the account was opened. However date of opening account is Irrelevent as IRS consider First date of the year in which account was opened as reckoning the limit of Opening of account. It means suppose you open account on 23 Aug 2017, Date of opening account shall be deemed as 1 JAN 2017. If a person withdrawing such amount is 59.5 years or older, such whole amount is Tax free however there is penalty for persons below 59.5 years.

2. The amount withdrawan is to be used to buy, build or rebuild the house, with a ceiling of $10,000 provided that such amount to be used withiin120 days of removal. It is also mandatory that such house shall be the first house of assessee.

3. The amount withdrawn is to be used for medical treatment of Disabled person.

4. The amount withdrawn is to be contributed among the benefeciaries of his estate after the death of such person. The whole amount shall be Tax free subject to Minimum Distribution Rules.

Hence there are different limits under different circumstances for the maximum amount to be withdrawn early under ROTH IRA.