Withdraw Roth IRA Contibutions

[workinstiff]

In 2003 I started a Roth IRA (actually 3 different funds - $1000 each to start). Not too long afterward I started a new job with a great 401k with employer matching up to 5% of my salary, into which I put everything I can. Besides a couple hundred dollars here or there I haven't contributed to the IRA - it's just sitting there basically doing nothing. Including the initial investment I've contributed a total of about 3,600 and it's barely worth 5,000.

Am I correct in that I'm allowed to withdraw all my contributions to the IRA without penalty? How do I go about doing it? Do I have to withdraw each separately or can I just consider it one IRA?

[jIM_Ohio]

contact the custodian of the IRA
you are getting what is known as a distribution from the IRA
they will file appropriate forms with IRS
and your tax return will recover any taxes withheld.

[disneysteve]

Why do you want to withdraw that money? Do you have some pressing need for it?

What percentage of your salary are you putting into the 401k? The usual advice is to fund the 401k enough to get the full company match and then switch to funding the Roth until that is maxed and then, if you still have funds available, go back to the 401k.

[poundwise]

The usual advice is to fund the 401k enough to get the full company match and then switch to funding the Roth until that is maxed and then, if you still have funds available, go back to the 401k.

This.

...I've contributed a total of about 3,600 and it's barely worth 5,000.

Assuming $3,600 is the correct amount of your contributions, you can withdraw up to $3,600 without penalty or taxes. If you withdraw the other $1,400, the earnings, you'll pay a penalty and owe taxes on that amount.

[workinstiff]

Thank you all.

DisneySteve, yes I have a pressing need. I'm currently contributing 6% - employer matching 5% into gov't Thrift Saving Plan. The elective deferral limit is 16,500, which I'm not close to but I'm not sure it would be worth putting 1% into IRA.

Thanks again

[disneysteve]

You are really asking 2 different questions.

1. Can you withdraw money contributed to a ROTH? The answer is yes. You can withdraw contributions but not earnings without penalty.

2. Should you continue to fund the Roth? I'd stand by what I said above. If your 401k matches the first 5%, I'd put 5% in and put any additional, whether it is 1% or whatever, into the Roth.