Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years. The account is now worth $376,000. How much of these funds can Frank withdraw tax-free?
A) $0
B) $131,244
C) $244,756
D) $376,000
E) None of the above

Question

Quizplus · Accepted Answer

In a Roth IRA, contributions are made with after-tax dollars, and both contributions and earnings can be withdrawn tax-free after age 59½, provided the account has been open for at least 5 years. Since Frank is over 59½ and the account has been open for 38 years, he can withdraw the entire $376,000 tax-free.

Frank Established a Roth IRA at Age 25 and Contributed