The TIAA group of companies does not provide legal or tax advice. Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.
Any money taken from a retirement plan is generally subject to a 10% early withdrawal penalty (unless certain conditions are met). You can withdraw money from those accounts tax free as long as you take the money at least 5 years after January 1 of the year in which you first contributed to that plan, and you are either age 59 ½ or older, or considered disabled.įor any retirement plan, there are penalties for taking money out if you're younger than 59 ½. You may hold a retirement plan that allows Roth contributions, which are made with after-tax money. However, note that any earnings from these after-tax contributions are still taxable. If you contributed money to your retirement plan on an after-tax basis you won’t have to pay taxes.
When you withdraw money that you contributed on a before-tax basis from your retirement plan, that money is taxed as ordinary income. That depends largely on whether you originally contributed that money before or after paying taxes on it.
