Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

Question

Quizplus · Accepted Answer

This is true. Roth IRA withdrawals follow the "first in, first out" principle, meaning that any withdrawals will first come from the contributions made to the IRA, followed by any earnings. This is because contributions are made with post-tax dollars and are not subject to taxes or penalties upon withdrawal, whereas earnings may be subject to taxes and penalties if withdrawn before age 59 1/2 or under certain circumstances.

Roth IRA Withdrawals Are Deemed to First Come from Contributions