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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?

Thanks.

  • The IRS uses the words interchangeably. In fact, one of the sections of Publication 590b is titled "When can you withdraw or use assets?" – Dilip Sarwate Jan 13 '17 at 14:46
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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 '17 at 15:03
  • @Tim please see my updated answer. I hope that answers your question. – Michael Jan 13 '17 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 '17 at 6:16

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