Roth IRA withdrawal of contributions - logistics

[delizzle]

I understand the rules of withdrawing from a Roth IRA, including withdrawal of contributions. But how does it work in practice?

We changed brokerages 5 years ago after maxing our contributions for the last 20. We don’t have the records.

We’re on track to meet our goals without issue, including if we withdraw the amount we’re considering.

We’d take from the regular brokerage first and possibly a TSP loan of $50,000. But even after taking these funds, we’re probably going to be $100k short, which could be covered by withdrawing Roth IRA contributions, or just take a higher mortgage. We wouldn’t need to have PMI.

Right now we’re exploring options, we’re a few years from buying unless the perfect house came available at the right price.

We’re not going to move there full time or sell our current home for another decade, this would be a second home and future residence.

I’m not looking for the usual “NeVeR wItHdRaW from YouR IRA!!!” Responses, we’ve done the planning, I just don’t quite understand the logistics / record keeping to make sure we’re only withdrawing contributions. I don’t want the IRS on us.

 

[labonall]

@delizzle your statements should show you contributions vs earnings balances

do you have the statements for your accounts? an app? online portal?

 

[delizzle]

@labonall Current accounts yes. But not the ones we transferred from 5 years ago.

I’d swear in court we maxed every year since 2000, at least for hers.

I suppose one answer is to just withdraw those contributions. $31,500 x 2 gives us $63k. Add that to the regular brokerage, I bonds and TSP loan gives enough for 20% down and extra for renovations if needed.

 

[labonall]

@delizzle I bet if you contacted your current broker they could pull up they break down for your transfer

 

[catlover88]

@delizzle One thing missing is what are your ages?

 

[mumof4grls]

@delizzle This is more of a tax question but I'll take a shot. Best documentation of your contributions would be 5498s from the prior years showing the contributions. These would be available from whatever custodian received the contributions. Next best would be statements from the IRA showing contributions or from the bank that contributions were taken from. Something that not only has the amounts of contributions but the year that they were coded to.

What's going to matter come tax time is you will get a 1099R with a code in Box 7 (probably a code 1, I'm assuming you're below 59.5). What will matter is what is listed as the taxable amount on that 1099 and the code. A tax person would help with what you claim on your taxes, documentation to have in case you get an IRS notice, and how to respond to the notice.