How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Stephen G. Your Own Question
Stephen G.
Stephen G., Sr Income Tax Expert
Category: Tax
Satisfied Customers: 6167
Experience:  Extensive Experience with Tax, Financial & Estate Issues
30050794
Type Your Tax Question Here...
Stephen G. is online now
A new question is answered every 9 seconds

My husband and I set up Roth IRAs about six years ago. We

This answer was rated:

My husband and I set up Roth IRAs about six years ago. We invested $3000 and then about a week later another $3000 as it was end of Dec/beginning of January. So we have a total of $12000 in Roth IRAs that was contributed not earned. our advisor at the time told us that after 5 years we would be able to take out the initial investment without tax or penalty. He has since left and our new advisor says he has never heard of that, that if we want to take out any portion contributed or earned that we will have to pay 10% and taxes unless we meet a qualifying event (which we do not. we are 40, it is not for school, medical, new home, etc...) we want the money to remodel our basement. I am leary because we did not choose this advisor, our old one left and he was randomly assigned (Waddell and Reed), after we left Missouri so we never even met this person. I am not sure what to do.

Stephen E. Grizey :

Hi & thanks for using our service. I'll do my best to give you a complete & accurate answer. Please ask me to clarify anything you don't understand.

Stephen E. Grizey :

The only thing that would be subject to both income tax & the 10% penalty would be any investment gains, not your original contributions.

Stephen E. Grizey :

So you can remodel your basement worry free.

Customer:

Is there somewhere on the IRS site that substantiates this or something I can send to our "advisor"? I guess if necessary I will need to talk to his supervisor? I kind of feel like either through ignorance or a desire for us not to remove our money he is holding it hostage :)

Stephen E. Grizey :

Sure let me give you a link, hang on..............

Stephen E. Grizey :

http://ezinearticles.com/?The-Roth-IRA-Early-Withdrawal-Penalty&id=2636621

Customer:

Terrific. Thanks. Glad to know our first advisor did not mislead us.

Stephen E. Grizey :

That's one quick one, if this so called "investment advisor" doesn't know this, you need a new advisor.

Stephen E. Grizey :

Please remember to ACCEPT.

Customer:

I agree. Like I said, after we moved out of state were assigned him. Haven't moved anything around with them in years as we started with another company. Thanks, XXXXX XXXXX

Stephen G. and other Tax Specialists are ready to help you

Related Tax Questions