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Are dividends from a 5+ year old established Roth IRA for a person over 70 1/2 tax free? I understand withdrawals of principal are tax free as they have already been taxed.

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    FWIW OP, when people mention that IRAs are 'tax-advantaged', this is what they're talking about. Other investment accounts do get taxed on the dividends.
    – ebwb
    Nov 29, 2016 at 14:45

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For a Roth IRA, everything withdrawn is tax free as long as you meet the age/time requirements.

You are correct that the contributions have been taxed; but the dividends, interest, and growth due to the price of the underlying securities are also tax free.

Also note - the key age is 59-1/2 for this to be true. 70-1/2 is when RMDs (required minimum distributions) take effect but there are no RMDs for Roth IRAs; you don't need to take any money out of a Roth IRA if you don't want to, and when you do take a distribution, it is (Federal) tax-free (subject, of course, to the 5-year and 59-1/2 years requirements.

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    Dilip - thanks for catching my bad edit. Inherited Roths do have RMDs, but not regular Roths. OP's use of 70-1/2 implied to me some misunderstanding somewhere. Nov 29, 2016 at 19:15

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