Mia contributed $25,000 to a Roth IRA. She retired at age 60 and would like to withdraw the funds. She is in the 25% federal marginal tax bracket. How much will she pay in income taxes on the funds?

Question

Quizplus · Accepted Answer

Roth IRA contributions are made with after-tax dollars, meaning the contributions and their earnings can be withdrawn tax-free in retirement, as long as certain conditions are met. Since Mia is over 59 1/2 years old and has likely met the five-year holding period, she will not owe any taxes on her withdrawals.

Mia Contributed $25,000 to a Roth IRA