Marie establishes a Roth IRA at age 40 and contributes the maximum amount per year to the Roth IRA for 25 years.The account is now worth $199,000,consisting of $75,000 in contributions plus $124,000 in accumulated earnings.How much can Marie withdraw tax free in 2011?

Question

Quizplus · Accepted Answer

Marie can withdraw the entire $199,000 tax-free because Roth IRA contributions are made with after-tax dollars, and qualified distributions, including earnings, are tax-free after age 59½ and after the account has been open for at least 5 years.

Marie Establishes a Roth IRA at Age 40 and Contributes