IRA withdrawals | Robinhood

IRA withdrawals

When you withdraw money from an IRA, it’s considered a distribution, which may incur taxes and penalties.

IRA withdrawals

To make a withdrawal from your traditional or Roth IRA:

  1. Go to Account (person icon)→ Menu (3 bars) or Settings
  2. In Transfers, select Transfer money
  3. Select the accounts you’d like to move money to and from, as well as the dollar amount
  4. To edit your tax withholding percentage select Federal/State taxes or select Amount you’ll receive
  5. Review and select Withdraw to complete your distribution

You can view your previous withdrawals anytime in Account History.

Withdrawal rules

Traditional IRA

If you need to withdraw money from your traditional IRA before you’ve reached age 59 ½, you’ll typically pay a 10% penalty on top of the expected income taxes you’ll owe. Withdrawals after reaching age 59 ½ are generally taxed as ordinary income. Required minimum distributions begin at age 73. In certain IRS-approved situations, you may take early withdrawals from your traditional IRA without penalty. Check out qualifying exceptions.

Roth IRA

Qualified withdrawals of Roth IRA contributions are always tax-and penalty-free. However, any earnings withdrawn early could be subject to both taxes and penalties, unless you've reached age 59½ and met the 5 year holding period requirement or you meet a qualifying exception.

Required Minimum Distributions (RMDs)

An RMD is the minimum dollar amount you must withdraw from your traditional IRA annually starting the year you reach age 73 to avoid tax penalties. You can always withdraw more than the required minimum if you want.

If you have multiple IRAs at different firms, you can satisfy your RMD from any combination of your traditional IRAs.

Example

If you have a traditional IRA with Robinhood with an RMD amount of $1,000, and a traditional IRA at ABC company with an RMD amount of $500, you could choose to withdraw $1,500 all from your Robinhood IRA. As long as your total RMD amount is removed, it can come from any combination of your traditional IRAs.

We’ll notify you if you have an upcoming RMD on your year-end statement. While we don’t include RMD calculations as part of this notification, you can ask us for help with them.

How it's calculated

Your RMD amount changes each year and is calculated by taking the year-end balance of all your IRAs combined and dividing it by your IRS Life Expectancy factor. You can use the RMD calculator to calculate your RMD based on your closing December 31 balance of the prior year. For specific questions about your RMD, consult with a tax professional.

Note

First-time eligible RMD customers have until April 1 of the year following the year in which you reach age 73 to take your first RMD. If you wait until the following year, you’re still required to take your second RMD by December 31 of that year.

Tax information

1099-R reporting information

If you took a distribution from your traditional or Roth IRA (including Inherited traditional or Inherited Roth IRAs) in 2024, your Form 1099-R will be available on January 31, 2025 for this tax year detailing the previous years’ distributions.

For specific questions about your tax situation, we recommend consulting a qualified tax professional.

Tax withholding elections information

Federal tax withholding for traditional IRAs will default to 10% and a state tax withholding default will vary depending on the state. You can opt out, or choose a percentage between 1% and 99%, for your federal tax withholding and your options will vary for state tax withholdings depending on the state.

Disclosures

Contents provided are for informational purposes only and don’t constitute tax or investment advice. For specific questions, you should consult a tax professional. Robinhood does not provide tax advice. Links to third party sites are being provided for informational purposes only.

The Robinhood IRA is available to any of our US customers with a Robinhood investing account in good standing. Note, if you have a B-Notice, you won’t be able to open an IRA until your account restrictions are lifted.

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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). Review a list of RHC licenses for more information.The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Review a list of our licenses for more information. Credit card products are offered by Robinhood Credit, Inc. ("RCT") (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.

RHF, RHY, RHC, RCT, and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC, RCT, and RHS are not banks. Products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. RHC isn’t a member of FINRA and accounts are not FDIC insured or protected by SIPC.

RHY is not a member of FINRA, and products are not subject to SIPC protection, but funds held in the Robinhood spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

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