Q: I opened a Roth IRA on March 15, 2001. Can I start taking tax-free withdrawals this year? D.D., Mission Viejo, Calif.
A: Maybe, it depends on your age. You can tap into your Roth tax-free after five years and if you are at least 59 1/2 years old. But that five-year holding period actually begins at the start of the tax year for which the contribution was made. So, assuming that your March 15, 2001, contribution was made for the 2000 tax year, your clock started ticking on Jan. 1, 2000. That means five years elapsed on Jan. 1, 2005, allowing you to take tax-free withdrawals now. Tip: Roth IRA distributions are completely tax-free after five years only if they otherwise are "qualified" distributions (e.g., you've reached age 59 1/2).
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