Please consider the following hypothetical situation:

A 30 year old investor puts $500 into a Roth IRA. When he turns 36, he takes all the money out and pays taxes on his profits and maybe a penalty too. Now, on his 60th birthday he decides to start saving for his future so he puts $500 into a Roth IRA. A month later, the account has a value of $550 and he takes all out. Is the $50 he made, tax free?

I think it is because he has money in a Roth IRA for 5 years and he is over 59.5 years of age.

  • 1
    The issue would be being able to prove the 5 year requirement was met. Does the IRS keep the first instance of having an Roth IRa in their database? And do you still have a statement decades later? Dec 11, 2023 at 2:55
  • @mhoran_psprep You raise an important issue about enforcement. However, for purposes of this question assume that all the facts given can be proved to the satisfaction of the IRS.
    – Bob
    Dec 11, 2023 at 3:37
  • Is there a reason the investor is shooting themselves in the foot by not putting money into the IRA until it's too late for that to help them much?
    – keshlam
    Dec 11, 2023 at 8:20
  • Would the financial institution really keep open an (any) account with no activity for 24 years? (yeah, I know, not the point of the question)
    – mkennedy
    Dec 11, 2023 at 12:41

1 Answer 1


A in IRA stands for Arrangement, not account. In the scenario you're describing, the tax payer satisfied the 5 year requirement since the distribution was more than 5 years later after the Roth IRA was first established to the taxpayer's benefit (which was at the age of 30).

See the IRS Publication 590-B:

A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

  • It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit.


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