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February 13, 2025
Question

If a Roth IRA was funded with post-tax money and is cashed out, shouldn't we just have to pay tax on the interest earned and not the cash value of the account?

  • February 13, 2025
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    February 13, 2025

    Yes, if a Roth IRA was funded with post-tax money, then the contributions can be withdrawn tax-free at any time. Earnings (interest, gains) are taxable and may be subject to a 10% penalty if withdrawn before you are 59½ and before the account has been open for 5 years.

     

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