Process

• To make a regular withdrawal from a Roth IRA, you simply need to contact your plan administrator and request a distribution form. You must specify the amount of money you wish to withdraw from your Roth account. Then you must note the account number and sign the form. Turn the form in to your broker or plan administrator.
  
  

Significance

• The withdrawal can be made anytime during your life. IRS ordering rules allow you to remove all of your contributions from a Roth IRA prior to withdrawing investment gains. There is no tax and no penalty on any withdrawals made this way. However, you cannot withdraw investment earnings prior to age 59 1/2 without a penalty.
  
  

Benefit

• The benefit of Roth withdrawals is that regular withdrawals are flexible. Since you can withdraw contributions prior to investment earnings, your Roth account can be used for emergency purposes to a certain extent. Your regular withdrawals after age 59 1/2 are income tax-free. Unlike traditional IRAs, Roth accounts are not subject to income taxes during retirement.
  
  

Disadvantage

• The disadvantage to Roth IRAs is that once you remove your contributions, you cannot put them back into the account and add your maximum contribution for the year. In other words, a withdrawal does not allow you to make your regular contribution plus a return of the amount you previously withdrew. This may negatively impact your future retirement account balance. Additionally, withdrawals of investment gains prior to age 59 1/2 are subject to a penalty of 10 percent plus ordinary income tax. You lose all tax benefits by withdrawing investment earnings before 59 1/2.