How much will I pay in taxes when I receive a distribution of my money?

  1. Unless Roth in character, your distribution will be taxed at your current tax bracket—given all the other income you have received—in the year of the distribution.
  2. Earnings on your Roth account balance are tax-free when withdrawn providing the distribution is a “qualified distribution.”
    1. A distribution to be “qualified”, two conditions must be met:
      1. You are over the age of 59 ½;
      2. The Roth account has existed for 5 years.
    2. Distribution of Roth contributions are always tax-free. The question is whether the earnings on the Roth balances are taxable or not.