This Overlooked Rule Could Make Some of Your Roth IRA Savings Taxable
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By Kailey Hagen, CFP – Apr 3, 2026 at 6:15PM ESTKey PointsYou can withdraw Roth IRA contributions tax- and penalty-free at any age.You can't withdraw earnings tax-free until you've had a Roth IRA for at least five years.Each Roth IRA conversion has its own five-year clock you must wait out before you can access these funds tax-free.Roth IRAs are popular for one main reason: You can take tax-free withdrawals in retirement. That means all the money is yours to spend however you want. There's no guesswork about how much you might lose to the IRS in the future. However, there is a specific situation in which the government could take a portion of your Roth IRA savings when you withdraw them. Here's how to avoid it. Image source: Getty Images. You pay taxes on your personal contributions to your Roth IRA in the year you make them, so you can withdraw those funds tax- and penalty-free at any age. When you make a Roth IRA withdrawal, the government considers you to be withdrawing contributions first, any conversions second, and earnings last. Roth IRA conversions and earnings have different withdrawal rules than contributions. For earnings, you can't withdraw these tax-free until you've had a Roth IRA for at least five years. It's OK if you haven't had your current Roth IRA for five years, as long as you've had another for at least that long. For conversions, every one has its own five-year clock that begins on Jan. 1 of the year you did the conversion. So, for example, if you did a Roth IRA conversion today, you wouldn't be able to touch that money tax-free until Jan. 1, 2031. None of this should be an issue for you if you're a long way from retirement. But if you're nearing retirement age, you might need to plan a bit ahead. This might mean starting Roth IRA conversions a little earlier than you planned, so you're in the clear by the time you're ready to retire.Read NextApr 3, 2026 •By Reuben Gregg BrewerHere's How Claiming Social Security at 62 Affects Your Monthly Income for LifeApr 3, 2026 •By Maurie BackmanThe Roth IRA Conversion Trap You Don't Want to Fall IntoApr 3, 2026 •By Kailey Hagen, CFPNo 401(k)?
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Before The Motley Fool, Kailey was a research analyst for Reviews.com focusing on credit and banking products. She is a Certified Financial Planner® and holds a bachelor’s degree in English from the University of Wisconsin-Madison.TMFKailey