For a designated Roth account, a distribution is qualified when two conditions are both met: a five-year period has passed, and the withdrawal happens because of reaching age 59½, disability or death. Qualified distributions are not taxed, including the earnings.
The five-year period
The IRS says the period begins on the first day of the taxable year for which the first designated Roth contribution was made. It counts from that date, not from the day of the deposit.
Example
A first Roth contribution is made in December 2026. The five-year period starts on January 1, 2026 and ends on December 31, 2030. A withdrawal at age 62 in 2031 would be qualified, because both the holding period and the age condition are met. A withdrawal at age 55 in 2031 would not be, because the age condition fails.
Common mistakes
- Treating the five years as 60 months from the deposit date; it starts at the beginning of the tax year.
- Assuming age alone is enough; the holding period also applies.
See 401(k) vs Roth 401(k) for how this fits into the choice of account, and the Roth IRA calculator for projections.
Educational only, not tax or investment advice.