A:



You can close your Roth IRA account without negative consequences if your total account balance is less than the accumulated amounts you deposited as regular contributions. Furthermore, if you distribute the total balance, you may be able to deduct the losses on your tax return.



For more information from the IRS on this matter, see "Recognizing Losses on Investments" in IRS Publication 590. (To learn more about retirement plans in general and the Roth IRA in particular, read A Tour Through The Different Retirement Plans.)



This question was answered by Denise Appleby
(Contact Denise)



RELATED FAQS
  1. What are the risks associated with a Roth IRA?

  2. Should I reinvest my dividends into my Roth IRA?

    I have two brokerage accounts, one is an individual account the other is a Roth IRA. I am thinking about using my dividends ... Read Answer >>
  3. What's the best kind of IRA for a 20-something?

  4. How do I open a Roth IRA if my Husband and I make over $300k?

    Between my husband and I, we make around 350k to 400k a year.  ... Read Answer >>
  5. I have two Roth IRAs, one of which has a balance that is much less than the total ...

    It depends. You are eligible to write off the losses only if the balance for both of your Roth IRAs (combined) is less than ... Read Answer >>
  6. Can I close my existing Roth IRA and invest in a new Roth IRA at a different financial ...

    If If you withdraw your Roth IRA contribution, the amount will be tax and penalty free. If your initial contribution accrued ... Read Answer >>
Related Articles
  1. Retirement

    Don't Make These Top 10 Mistakes On Your Roth IRA

    Don't lose out on the benefits of a Roth by contributing too much, breaking rollover rules or making other avoidable errors.
  2. Retirement

    Funding Your IRA vs. Your Roth IRA, Which First?

    The answer depends on where you are in your career and personal life each year. Here are some scenarios and rules to think about.
  3. Retirement

    Roth 401(k) Vs. Roth IRA: Which One Is Better?

    It all depends on your age, your income - and your plans for your retirement nest egg.
  4. Retirement

    Roth vs. Traditional IRA: Which Is Right For You?

    To answer this question, you need to consider several of the factors we outline here.
  5. Retirement

    Deducting Losses On Your IRA Investments

    In regular accounts in which taxes are not deferred, losses on investments can be included on your tax return. Find out how.
  6. Retirement

    How to Use Your Roth IRA as an Emergency Fund

    Do you feel like you don’t have enough money to save for emergencies and also save for retirement? An often-overlooked feature of the Roth IRA could solve your problem.
  7. Retirement

    These IRA Contributions Will Cut Your 2015 Taxes

    No matter how you save for retirement, take advantage of the time between now and April 15, 2016, to add to your nest egg while cutting your tax bill.
  8. Retirement

    6 Reasons Not to Recharacterize Your Roth IRA

    If you're thinking of recharacterizing your Roth IRA into a traditional IRA account, here are six compelling reasons why you should reconsider.
  9. Retirement

    In Your 20s? Reasons To Get A Roth IRA Now

    There are strong reasons to put retirement savings into a Roth IRA now, while time is on your side, your salary hasn't peaked, and the rules favor you.
  10. Financial Advisor

    IRAs: Top Things You Need to Know About Them

    By understanding the major rules for both traditional and Roth IRAs, you'll be prepared to enjoy the benefits of these investment opportunities.
RELATED TERMS
  1. Roth IRA Conversion

    A reportable movement of assets from a Traditional, SEP or SIMPLE ...
  2. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  3. Qualified Distribution

    Distributions made from a Roth IRA that are tax and penalty free. ...
  4. IRA Plan

    A plan that individuals may establish to arrange and plan for ...
  5. IRS Publication 590: Individual Retirement Arrangements (IRAs)

    A document published by the Internal Revenue Service (IRS) that ...
  6. Non-Qualified Distribution

    1) A distribution from a Roth IRA that occurs before the Roth ...
Hot Definitions
  1. GBP

    The abbreviation for the British pound sterling, the official currency of the United Kingdom, the British Overseas Territories ...
  2. Diversification

    A risk management technique that mixes a wide variety of investments within a portfolio. The rationale behind this technique ...
  3. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  4. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  5. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  6. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
Trading Center