Can Funds Be Taken Out and Put Back in a Roth IRA?

by Maggie McCormick, studioD

It's possible to "borrow" money from your Roth IRA, but only for a short time. The disadvantage is that you potentially lose out on earnings and if you wait too long to pay yourself back, you may not be able to. If you're running out of options, though, consider taking funds out of your Roth IRA.

Contributed Funds

Because you contribute after-tax dollars to a Roth IRA, Internal Revenue Service rules allow you to withdraw the funds you've contributed to the account, without penalty, at any time. You simply have to request the money from your fund manager. Keep in mind, though, that there are annual limits on how much of this money you can put back into the account.


If you are under 59 1/2, you will pay a 10 percent penalty when taking out any of the earnings in your account, unless the withdrawal is for a specific exempted purpose, such as the first-time purchase of a home. After that age, though, you are eligible for penalty-free withdrawals.

IRA Rollover

Though not technically a loan, you are able to roll over the money in your IRA either within the existing account or to a new account. In this process, you'll receive a check for the money, but you have to redeposit the money in a Roth IRA within 60 days. This gives you a very short-term loan and allows you to put the entire amount that you borrow back into your account. The 60-day limit is firm and if the 60th day falls on a weekend or holiday, you must deposit your money in advance.

After 60 Days

After the 60-day limit, you can only redeposit the maximum contribution amount for the year. If you've already made contributions during the year in which you withdrew the funds, you can deposit the limit minus any current-year contributions. As of publication, the limit is $5,000 for those under 50 and $6,000 for those 50 and over.

About the Author

Maggie McCormick is a freelance writer. She lived in Japan for three years teaching preschool to young children and currently lives in Honolulu with her family. She received a B.A. in women's studies from Wellesley College.

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