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I understand that you can withdraw your principal from a Roth IRA anytime without penalty. But what becomes of the earnings accumulated on that principal?

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    It stays in the account and can be drawn on penalty free once you've attained the specified retirement age.
    – quid
    May 2, 2017 at 23:19

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After age 59 1/2, the earnings are tax free as well - with a few exceptions, such as foriegn income. For the most part, it it safe to say that you can withdraw principal and earnings without tax liability.

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  • For Roth it's 59 1/2 (or disabled or deceased) AND at least 5 years after you opened the Roth, or more exactly 5 years after the beginning of the year you first contributed to any Roth IRA. And I've never heard of any US tax for foreign income in an IRA nor does Pub 590B have it -- although you do lose the credit or deduction you could have gotten if foreign income subject to foreign tax is in a normal (not tax-preferred) account.
    – dave_thompson_085
    May 3, 2017 at 21:45

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