Hi everyone
I have a questions regarding IRA Contributions, gains and associated taxes. I read that any contributions I make are withdrawable tax-free at any time. Any gains I make in that account are withdrawable tax-free only after I have owned the account for 5 years AND after I am over 59.5 years old
Main question: are any gains non-taxable after the criteria are met? If I kept depositing 1k a year from age 30, but my account value at age 60 is 200k, I withdraw the entire 200k free of any tax? No income, capital gains, nothing?
Second scenario: I contribute 1k from age 30 to 34, so 4k total. In this time, trading stocks, options, whatever, the total value has become 8k, so a total 4k gain. Can I withdraw 4k ( my contribution) tax-free, and leave the other 4k in the account to just grow till I'm 59.5?
Now, I can't withdraw a single cent before the age of 59.5 without paying taxes – right?
And if I had to withdraw all 8k, then 4k would be tax-free, and what about that other 4k, the “gains”? What rate are they taxed- would it be income tax bracket, or some other %?
What do you all think?
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