Key takeaways

• The “clock” for the Roth IRA five-year rule typically starts Jan. 1 of the tax year of the first Roth IRA contribution.
• Tax-free withdrawals of earnings generally require both the five-year holding period and a qualifying event, such as reaching age 59 ½.
• Roth conversions have separate five-year clocks that can affect withdrawals.

Roth individual retirement accounts (IRAs) can be a tax-advantaged way to save for retirement — if savers pay attention to the requirements. Among them is the Roth IRA five-year rule, which refers to how an account must be funded for five tax years before people can withdraw earnings tax-free.¹

With Americans having an average Roth IRA balance of more than $106,000, it’s important to understand the five-year rule and how it could affect potential taxes and penalties before and during retirement.

What is the five-year rule for a Roth IRA?

The Roth IRA five-year rule is an IRS regulation that determines when Roth IRA earnings can be treated as part of a qualified distribution. The “clock” generally starts on January 1 of the tax year in which a contribution was first made to any Roth IRA. For people with multiple Roth IRA accounts, the five-year period applies to the first contribution to any Roth IRA they own, not each new Roth IRA they open.²

Those watching the clock should note that the five-year rule counts tax years, rather than five years from the exact date the first contribution arrives in your account.

Savers interested in converting existing pre-tax retirement accounts into a Roth IRA should also note that a separate five-year rule can apply to Roth conversions and rollovers when it comes to early-withdrawal penalties.

What counts as a qualified Roth IRA distribution?

Be aware that fulfilling the five-year rule is not all you need to do to make Roth IRA withdrawal tax-free.

Once the five-year period is met, earnings can generally be withdrawn tax-free if another qualifying condition is met, such as reaching age 59 1/2 or older, being disabled, or using the proceeds for a first-time home purchase. The specific rules for qualified distributions are covered in IRS Publication 590-B.³

Regular Roth IRA contributions can generally be withdrawn without paying taxes or penalties because they were made with after-tax dollars.

When does the Roth IRA five-year clock start?

The five-year holding period to qualify Roth IRA earnings for tax-free treatment generally begins on January 1 of the tax year of the first contribution.⁴

Because one year’s worth of Roth IRA contributions under the rule could straddle across calendar years, take note that a prior-year contribution made before the filing deadline can make the clock start on January 1 of the prior tax year.

The five-year requirement can be different for savers with other IRA transactions. Each conversion or rollover can have its own separate five-year period.⁵

For example, if a person makes a Roth IRA contribution in April 2026 and designates it for tax year 2025, the Roth IRA aging clock generally begins January 1, 2025. If they make a separate Roth conversion in 2026, the conversion's five-year period generally begins January 1, 2026.

Contributions, conversions, and earnings follow different withdrawal rules

For a deeper breakdown of withdrawal types, see Empower's Roth IRA withdrawal rules.

Roth conversion five-year rule: Separate clocks for each conversion

A Roth conversion moves money from a pre-tax account — such as a traditional IRA or eligible workplace plan — into a Roth IRA. Because the original contributions to the original account were made using pre-tax dollars, the account holder would generally need to pay income tax on taxable converted amounts being moved into the Roth IRA in the conversion year. At this point, a new, separate five-year clock would start for that specific conversion amount.⁶

If converted amounts are withdrawn before the conversion's five-year period is met and the person is under age 59 1/2, the 10% additional tax may apply to taxable converted amounts unless an exception qualifies.⁷

Read more: What a backdoor Roth IRA is and how to use it

Considerations for Roth 401(k) rollovers, inherited Roth IRAs

Roth retirement accounts have become more popular among younger generations of Americans, so savers should also know that other Roth accounts can impact the five-year rule for Roth IRAs.

Among the 401(k) rollover options for people leaving a job is moving the money into a Roth IRA. However, the tax treatment for earnings will not carry over; the time that funds have been held in a Roth 401(k) account does not count toward the five-year rule for the Roth IRA when performing a rollover.⁸ Referring to a tax professional can provide more personalized details.

For savers who inherit a Roth IRA, there’s a separate and different “ten-year rule” that does not refer to the holding period. Instead, this ten-year rule explains how long the beneficiary has to make withdrawals from the deceased owner’s account.⁹ While no withdrawals are required in the first ten years after the owner’s death, the account must be emptied by the end of the tenth year if the ten-year rule applies. Whether an account is subject to this ten-year rule depends on the beneficiary’s relationship to the original owner, so it’s wise to consult IRS documentation on the differences.¹⁰

Read more: Inherited IRA beneficiary options & withdrawal rules

What happens if you withdraw before the five-year rule is met?

If you take a distribution from a Roth IRA before the five-year clock has finished, it’s considered a non-qualified distribution and some of that amount (the earnings) could be taxable.¹¹ Beyond income tax, a 10% additional tax could apply to the taxable portion of early distributions, unless you fall under a specific exception.¹²

Roth IRA distributions within the five-year period would be withdrawn according to IRS ordering rules:¹³

1. Regular Roth IRA contributions
2. Conversion and rollover contributions, with a “first-in, first-out” approach. This means eligible funds from earlier years would be earmarked for withdrawal before more recent conversions and rollovers.
3. Earnings on contributions

Because Roth IRA contributions are made with post-tax dollars and can always be withdrawn tax-free, it’s possible to lessen the tax impact of a withdrawal by taking out an amount less than or equal to your total contributions to the account.

How to plan around the Roth IRA five-year rule

Every financial situation is different and could change over the course of their career. The impact of waiting five years can depend on factors such as earnings, specific money goals and needs, and overall retirement savings. Here’s what to consider when planning with the five-year rule in mind:

• Start saving as early as possible: With people retiring at age 64 on average, contributing to a Roth IRA well before retirement allows the five-year rule to run its course before you may need to start withdrawing funds. Review current Roth IRA contribution limits and income phaseouts before contributing.
• Keeping diligent records: Track the tax year of all Roth IRA contributions and each conversion year. Retain copies of IRS form 1099-R (for distributions) and form 5498 (contributions) from your Roth IRA provider, along with any conversion documentation, to help inform your account timeline.
• Balancing withdrawals from a Roth IRA with other accounts: Savers who have additional tax-advantaged accounts — such as a traditional IRA, 401(k), or health-savings account — should consider all options and how taxes could be affected. It could be helpful to consult with a financial professional or tax advisor to understand the future impacts.

Frequently asked questions on Roth IRAs

How much can I put into a Roth IRA?

Roth IRA contribution limits for 2026 are $7,500 for individuals under age 50 ($8,600 if 50 or older). Your tax filing status and modified adjusted gross income determine whether you are eligible to contribute to a Roth IRA up to the maximum, only partially, or not at all.

How long can you contribute to a Roth IRA?

There is no maximum age limit to contribute to a Roth IRA if a person has eligible earned income and meets income rules.

At what age must you withdraw from an IRA?

Traditional (pre-tax) IRAs do have rules around required minimum distributions, while Roth IRAs do not require RMDs during the original owner's lifetime. Withdrawal rules for those inheriting an IRA can depend on the relationship between the beneficiary and the owner.