The basic process: IRA to checking takes one to three business days

To move money from an IRA to a checking account, you request a withdrawal from your IRA custodian (the bank or brokerage holding the account), and they send the funds to your checking account via ACH transfer or wire. The money typically arrives in one to three business days. You will owe income tax on the full amount withdrawn in the year you withdraw it, and if you are under 59½, you will also owe a 10 percent early withdrawal penalty unless an exception applies.

The process itself is straightforward because your IRA custodian handles the mechanics. What matters more is understanding the tax consequence before you move the money, because once it lands in checking, the tax bill is locked in.

Key Takeaways

  • Withdrawals from traditional IRAs are taxed as ordinary income in the year you withdraw them, and withdrawals before age 59½ carry a 10 percent penalty unless you meet a specific exception.
  • Roth IRA withdrawals of contributions (the money you put in) are never taxed, but earnings on those contributions are taxed and penalized if withdrawn before 59½ unless an exception applies.
  • Your IRA custodian needs your checking account number and routing number to send the money, and the transfer usually takes one to three business days.
  • If you withdraw money and then change your mind within 60 days, you can roll it back into an IRA to undo the tax consequence, but you can only do this once per year.

Traditional IRA withdrawals: what you owe in taxes

When you withdraw from a traditional IRA, the entire amount is taxed as ordinary income. If you contributed $50,000 and withdraw $20,000, you owe income tax on the full $20,000 at your marginal tax rate that year. The IRS will send you a Form 1099-R showing the withdrawal amount, and you report it on your tax return.

If you are under 59½, you also owe a 10 percent early withdrawal penalty on top of the income tax, unless you meet one of the IRS exceptions. The main exceptions are: disability, medical expenses over 7.5 percent of your adjusted gross income, health insurance premiums while unemployed, first-time home purchase (up to $10,000 lifetime), substantially equal periodic payments (a specific calculation), or higher education expenses. If none of these explore to you, the penalty is automatic.

Your custodian will withhold 10 percent of the withdrawal for federal income tax unless you tell them not to, but that withholding is not the same as your actual tax bill. If you owe more than 10 percent, you will owe the difference when you file your return. If you owe less, you get a refund.

Roth IRA withdrawals: contributions versus earnings

A Roth IRA works differently. You can withdraw your contributions (the money you deposited) at any time, tax-free and penalty-free, because you already paid tax on that money when you earned it. The tricky part is the earnings — the investment gains on top of your contributions.

If you withdraw earnings before age 59½, you owe income tax on the earnings plus the 10 percent penalty, unless an exception applies. Your custodian will not automatically know which part of your withdrawal is contributions and which is earnings, so you need to track this yourself or ask your custodian for a breakdown. The IRS uses a pro-rata rule: if your Roth IRA is 60 percent contributions and 40 percent earnings, then 40 percent of any withdrawal is treated as earnings subject to tax and penalty.

If you are 59½ or older and have held the Roth for at least five tax years, all withdrawals — contributions and earnings — are tax-free.

How to request the withdrawal from your custodian

Contact your IRA custodian directly. This is the bank, brokerage, or investment firm where your IRA account sits. You can find the name on your IRA statement or the annual Form 5498 the custodian sends you.

Most custodians let you request a withdrawal online through their portal, by phone, or by mail. You will need to provide your checking account number and routing number so the custodian knows where to send the money. Some custodians ask you to fill out a withdrawal form; others process it through their website. Ask whether the custodian will withhold taxes automatically or whether you need to specify an amount.

Once you submit the request, the custodian typically processes it within one to two business days and sends the money via ACH transfer (the standard electronic method). ACH transfers usually arrive within one to three business days after the custodian sends them, though some banks take longer. If you need the money faster, ask whether your custodian offers wire transfer instead; wires usually arrive the same day or next business day but may carry a fee.

The 60-day rollover window: how to undo a withdrawal

If you withdraw money from an IRA and then decide you do not want to pay the tax, you have 60 days to put the money back into an IRA and undo the withdrawal. This is called a rollover. When you roll the money back, the IRS treats the withdrawal as if it never happened, and you owe no tax on it.

The catch: you can only do this once per year, per IRA account. If you withdraw from multiple IRAs in the same year, you can roll one of them back but not the others. And the 60 days starts the day you receive the money in your checking account, not the day you requested the withdrawal.

To execute a rollover, deposit the full amount (including any taxes withheld) back into an IRA within 60 days. You can deposit it into the same IRA or a different one. Your new IRA custodian can walk you through the process. If you miss the 60-day window, the withdrawal is permanent and the tax bill stands.

Transfers between IRAs at different custodians

If you want to move money from an IRA at one custodian to an IRA at another custodian (not to checking), that is a different process called a direct transfer or trustee-to-trustee transfer. The two custodians handle the move directly, and no tax is owed because the money never touches your hands. This is the cleanest way to consolidate IRAs or switch custodians.

A direct transfer takes five to ten business days because the custodians coordinate with each other. You do not have a 60-day window to change your mind, so make sure you want to move the money before you request it. If you want to move money to checking instead, you must do a withdrawal as described above, not a direct transfer.

What happens if you do not report the withdrawal

Your IRA custodian sends a Form 1099-R to the IRS showing the withdrawal amount. If you do not report it on your tax return, the IRS will notice the discrepancy and send you a notice. You will owe the tax, the penalty (if applicable), and interest on both, plus potential accuracy-related penalties.

Even if you rolled the money back within 60 days and owe no tax, you still need to report the withdrawal and the rollover on your tax return using Form 8606 (for Roth IRAs) or your regular tax forms (for traditional IRAs). This tells the IRS that the withdrawal was reversed and you owe nothing.

Frequently Asked Questions

Can I withdraw from an IRA without paying the 10 percent penalty if I am under 59½?

Yes, if you meet one of the IRS exceptions: disability, medical expenses over 7.5 percent of your adjusted gross income, health insurance premiums while unemployed, first-time home purchase (up to $10,000 lifetime), substantially equal periodic payments, or higher education expenses. Otherwise, the penalty applies. Check IRS Publication 590-B to see if your situation qualifies.

What is the difference between a withdrawal and a rollover?

A withdrawal moves money out of an IRA to your checking account and triggers a tax bill. A rollover moves money from one IRA to another IRA within 60 days and avoids the tax bill. You can only do one rollover per year per IRA account.

Do I have to withdraw the entire IRA balance, or can I take out just part of it?

You can withdraw any amount you want. The tax and penalty explore only to the amount you withdraw, not the balance you leave behind. If you withdraw $10,000 from a $100,000 IRA, you owe tax and penalty on the $10,000 only.

How long does it take for the money to show up in my checking account?

One to three business days is typical for an ACH transfer. Wire transfers are faster (same day or next business day) but may carry a fee. Ask your custodian which method they use and whether you can request a wire instead.

What if I withdraw money and then want to put it back?

You have 60 days from the day you receive the money to roll it back into an IRA. Deposit the full amount (including any taxes withheld) into an IRA account, and the withdrawal is reversed. You can only do this once per year per IRA account.