Can I Roll Over My Roth IRA Into a Regular Savings or a CD?
A Roth IRA is one of several types of Individual Retirement Arrangements. IRAs offer a tax-advantaged way to save money for retirement. However, these accounts are subject to rules and regulations as determined by the IRS regarding how and when both contributions and withdrawals can be made. While a Roth IRA can be rolled over to a regular savings account or CD, there may be tax consequences for doing so.
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Benefits
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A Roth IRA account provides tax-free growth on all monies invested in the IRA. In addition, if the account holder is over 59 1/2 all withdrawals from the account are tax-free as well.
Function
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Although IRA accounts are subject to certain IRS rules and regulations, all funds remain the property of the account holder. As such, the money within a Roth IRA may be transferred to another account or simply withdrawn at any time. However, there may be tax consequences for doing so.
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Considerations
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Taxpayers who are age 59 1/2 or older may withdraw any or all funds from a Roth IRA at any time tax-free. These funds may be rolled over into a regular savings account or CD.
Warning
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Taxpayers who are not older than 59 1/2 may be subject to taxes and penalties if money is withdrawn from a Roth IRA to roll over into a savings account or CD. All income and gains earned on contributions to a Roth IRA are subject to a 10-percent tax penalty, as well as ordinary income taxes if withdrawn prior to age 59 1/2.
Considerations
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All contributions made to a Roth IRA are after-tax funds. As such, the total amount of contributions made to the account may be withdrawn at any time without penalty or additional taxes, provided that all interest and gains earned on those contributions remain in the account until the account owner turns 59 1/2 years old.
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