This tool takes a hypothetical Roth withdrawal and tells you exactly how the IRS will characterize each dollar. It applies the Roth IRA ordering rules — contributions out first, then conversion principal (oldest first), then earnings last — and determines whether each tranche is taxable, penalty-subject, or clean. The output is a breakdown of your withdrawal by dollar, with the tax and penalty consequences spelled out for each piece.
Most Roth owners don't realize that a "withdrawal" is actually a stack of potentially different tax treatments. The first dollars out are always your basis (original contributions), which come out tax- and penalty-free, always. After that, you're pulling conversion principal on a FIFO basis, and each year's conversion has its own five-year clock. Only after exhausting conversions do you touch earnings, which is where most of the tax and penalty exposure lives.
Who should use this tool
Roth owners under age 59½ who are considering any withdrawal. Also pre-retirees who executed conversions in the last five years and want to know which conversion tranches have completed their seasoning. Also anyone who inherited a Roth and needs to understand what the 10-year clock does to their specific account.
Over-59½ Roth owners whose Roth is at least five years old can skip this tool — everything is qualified, tax- and penalty-free.
Walking through the inputs
Your Roth basis (lifetime contributions). The total you've ever contributed to the Roth. Reported cumulatively on Form 5498.
Conversion history. Each conversion you've done, with the year and the pre-tax amount converted. The five-year clock starts January 1 of the conversion year.
Earnings to date. The current account value minus basis minus conversion principal. The tool can compute this automatically if you enter your current balance.
Proposed withdrawal amount. The dollars you're thinking about taking out.
Your age and whether the Roth has been open five years. Both triggers matter for whether earnings qualify as tax-free.
How to read the result
The tool returns a stacked bar showing how the withdrawal is layered: contributions first (always clean), then conversion principal by year (penalty-subject if within five years of the conversion and under 59½), then earnings (taxable plus penalty if not qualified). Each layer shows dollars, tax, and penalty separately.
Below the stack, the tool shows the "damage" — total tax and penalty — and the net you'd actually receive. It also shows what the same withdrawal would look like after the next year, if waiting would remove some exposure.
Common mistakes this tool prevents
- Thinking the five-year clock is a single clock. There are actually two five-year clocks for a Roth: the "first contribution" clock (for earnings qualification) and per-conversion clocks (for avoiding penalty on converted principal). Different clocks, different rules.
- Treating conversions as contributions. Conversion principal and regular contribution are both tax-free on withdrawal (after the relevant clock), but they sit in different layers of the ordering stack. Contributions always come out first.
- Forgetting that earnings are taxable to an under-59½ owner even if the Roth is ten years old. The age-59½ requirement for qualified earnings is in addition to the five-year rule, not instead of it.
- Not using the exception list. First-home purchase, education expenses, substantially equal periodic payments, and several other §72(t) exceptions avoid the 10% penalty on earnings for under-59½ owners. The tool checks these only if you enable the exception panel.
- Inherited Roth confusion. The ordering rules for an inherited Roth held by a non-spouse beneficiary are different — the 10-year rule governs, and distributions before the end of year 10 are optional rather than mandatory (in most cases). Use the Inherited Roth 10-Year Schedule tool for those calculations.
After you see the breakdown
If the damage is unacceptable, consider waiting — often a 12-month delay advances a conversion past its five-year clock or advances you past 59½, either of which can eliminate most of the exposure. If you need the money now, the tool's "use an exception" panel shows whether any §72(t) exception applies to your situation.
The Withdrawal Rules pillar covers the ordering rules and each exception in full.
Worked example: $30K emergency withdrawal at age 55
Carlos, 55, faces an unexpected medical-and-legal bill of $30,000 he can't cover from outside savings. He has $180,000 in his Roth IRA, built from $90,000 in lifetime contributions (since 2002), $30,000 converted in 2022, and $60,000 of earnings. He's under 59½, and the Roth has been open 23 years so the first-contribution clock is long complete.
The explainer stacks the $30,000 withdrawal into Roth's ordering layers. The first $30,000 comes out of his $90,000 of lifetime contributions — that layer is always tax-free and always penalty-free, regardless of age. He can withdraw the full $30,000 without touching any earnings or conversion tranches. Tax cost: $0. Penalty: $0. Net to Carlos: $30,000.
Had he needed $100,000 instead, the stack would be more interesting. The first $90,000 comes from contributions (tax-free, penalty-free). The next $10,000 comes from his 2022 conversion. Because that conversion is three years old (not yet five), the 10 % penalty applies to the pre-tax portion of the conversion (which was roughly $7,000 of the $10,000 taken, assuming the 2022 conversion was 70 % pre-tax). Penalty: $700. Tax: $0 on the conversion principal itself.
Had he needed $200,000, the stack would reach earnings. After exhausting $90,000 contributions and $30,000 conversion principal, the remaining $80,000 is earnings — and under-59½ earnings distributions are both taxable and subject to the 10 % penalty (unless a §72(t) exception applies). Tax at his 22 % bracket: $17,600. Penalty: $8,000. Total cost to access the last $80,000: $25,600, or 32 % of the amount withdrawn.
The lesson from the stack: small-to-moderate Roth withdrawals by under-59½ owners are usually much cleaner than first feared, because contributions come out first and are always clean. Large withdrawals that reach conversion or earnings layers get expensive quickly. The explainer makes the layers explicit so users know exactly where in the stack they're drawing and what the cost is.