How do I withdraw from Roth IRA to a Traditional IRA?
Summary:
- The main problem reported by the user is the inability to withdraw funds from their Roth IRA, as they see that there is $0 available to withdraw.
- The solution discussed includes checking if recent deposits are still collecting, as it may take 2 to 6 business days for funds to become available for withdrawal.
- Additionally, the user was informed that they can withdraw their contributions from a Roth IRA without taxes or penalties, provided they have not made any profits.
- It was also explained that transferring from a Roth IRA to a Traditional IRA is known as a recharacterization, which has no tax implications, while transferring to a regular account is treated as a distribution and may involve taxes depending on the situation.
Here’s the full thread
Is there any way to withdraw Roth IRA to a traditional or a regular account?
Hey, @starry! Yes, you can definitely make a withdrawal from your Roth and Traditional IRA to either another Fidelity account or your linked bank account. To do so, follow these steps on Fidelity.com:
1. Click “Accounts & Trade” and select “Transfers” in the dropdown
2. Navigate to the “Deposits, withdraw, or transfer money” link
3. Enter the appropriate steps
Just keep in mind that there may be tax implications when doing so. To learn more about Roth vs. Traditional IRA withdrawals, click here: https://www.fidelity.com/retirement-ira/ira-comparison
If you’d like to share more about which IRA you have, I can certainly go more in-depth about what the withdrawal might mean for you.
What if I made no profits? Invested money but looking into it I would rather have a traditional instead a Roth so I just have money inside nothing purchase for anything
Well because Traditional IRA contributions are tax-deductible (pre-tax), the distributions are typically taxable, even if you made no profits. Roth IRAs, on the other hand, are post-tax contributions, meaning you already paid taxes on the amount that’s going into the account. This means you can withdraw your contributions at any time for any reason without taxes or penalties. That said, any potential gains on the amount may also be tax and penalty-free if you meet specific criteria.
I see ok but when I go to transfer it says I can’t withdraw for my Roth
It says $0 available to withdraw
Ah okay, did you make a recent transfer into the account from an outside bank? Or, do you have the funds invested at all?
None invested
And the cash is settled
It’s possible that the deposit is still collecting. That is a common reason you might see the deposit in the “Cash Available to Trade” balance, but not in the “Cash Available to Withdraw” yet. For Electronic Funds Transfers (EFTs), it typically takes 2 to 6 business days to fully collect.
To see when your deposit is fully collected, follow these steps:
1. Click “Accounts & Trade” and select “Cash Management” in the dropdown
2. Choose your specific account on the left
3. Review under the “Upcoming Activity” tab
Ah I see ok thank you!
Would there be a difference in transferring to traditional or transferring to a normal account?
Not sure I know what you mean. Where would you be transferring the funds from?
The Roth IRA
Transferring from Roth IRA to traditional Ira or a regular account would everything be pretty much be same
Oh I see! So there is a difference between these two. If you transfer funds from a Roth IRA to a Traditional IRA, that is known as a recharacterization. There is no tax or penalty assessed. The Traditional IRA contributions may or may not be tax-deductible, depending on your tax situation. To do this, you would need to complete a form.
To transfer from a Traditional IRA to a non-retirement account (Fidelity account or bank account), that would be considered a distribution. If you are just withdrawing your contributions, then there’s no worries about taxes or penalties.
Here is more info on recharacterizations: https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras#Recharacterization%20of%20IRA%20Contributions
I see ok thank you!
You’re welcome! Definitely let us know if you have any other questions. IRA topics can get tricky.
It has to be open 5 yrs before u withdraw to be penalty free
Thanks for reaching out to us, @mrDebro76✊🏿 !
If your Roth IRA withdrawal is qualified, the full balance is tax and penalty-free. To be qualified, a withdrawal must occur at least five years after January 1 of the year of your first Roth IRA contribution or conversion and must meet one of the following conditions:
Owner is at least 59 1/2.
Death of the owner.
Disability, as defined by the IRS.
Qualified first-time homebuyer expenses (up to a $10,000-lifetime limit).
Let us know if you have additional questions!🟢