What are the relation and difference between distribution and withdraw?

In the context of IRA, do distribution and withdraw mean the same? Do they both mean either the action of taking money out of an IRA account, or the amount of such money?

More generally in investment, for an investment account, do they mean the same?


  • The IRS uses the words interchangeably. In fact, one of the sections of Publication 590b is titled "When can you withdraw or use assets?" Jan 13, 2017 at 14:46

1 Answer 1


This does not apply to Roth IRAs. It defines the difference between the two depending on what your age is when this happens. If you are 59 or younger, you have a 10% penalty in addition to taxes. If you are between 59.5 and 70, there is no penalty, but you do have to pay taxes. If you are 70.5 or older, then you MUST withdraw money, and that withdrawal is called the "required minimum distribution" and you pay taxes on it as if it were income.

In terms of investments, the two are the same in that the earnings you make on your investments grow tax free.

Here is more information between the two.

*Improvements are welcome for my answer.

  • For general investment accounts, do the two mean the same?
    – Tim
    Jan 13, 2017 at 15:03
  • @Tim please see my updated answer. I hope that answers your question.
    – Michael
    Jan 13, 2017 at 15:10
  • For an investment account, is the action of a stock or mutual fund giving out dividend to the investment account considered as distribution, and not as withdrawal? Does withdrawal mean the account holder take money out of the investment account?
    – Tim
    Jan 16, 2017 at 6:16

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .