You can borrow from a traditional IRA only through a specific workaround, and you cannot borrow from a Roth IRA at all

IRAs are designed to hold money until you retire. The rules are strict about taking money out early, and borrowing is not officially allowed. However, there is one legal way to temporarily access your traditional IRA funds: the 60-day rollover rule. This is not a loan in the traditional sense — it is a withdrawal that you must return within 60 days or face taxes and penalties.

A Roth IRA has no borrowing option at all. You can withdraw the money you contributed (not the earnings), but once it is out, it is out. You cannot put it back and reclaim the contribution room you used.

If you need cash and have an IRA, there are other paths worth exploring before you attempt either of these routes, because both carry real costs if something goes wrong.

Key Takeaways

  • The 60-day rollover is the only way to temporarily access traditional IRA money without a permanent withdrawal, and you must return the full amount within 60 days or it becomes taxable income.
  • If you miss the 60-day important date, the IRS treats the money as a distribution, which means income tax plus a 10 percent early withdrawal penalty if you are under 59½.
  • You can withdraw contributions (not earnings) from a Roth IRA at any time without penalty, but you cannot borrow the money back.
  • A 401(k) plan loan is often a better option than an IRA withdrawal because you repay yourself with interest and keep the money growing.
  • The 60-day rollover can only be used once per year across all your IRAs combined, so using it twice in 12 months will disqualify the second withdrawal.

How the 60-day rollover works as a temporary withdrawal

A rollover is when you move money from one retirement account to another. The IRS allows you to do this once per year per account type, and you have 60 days to complete the move. If you withdraw money from your traditional IRA and deposit it back into a traditional IRA (or another may be able to access retirement account) within 60 days, the IRS does not count it as a distribution.

This means you can withdraw cash, use it for whatever you need, and return it without triggering taxes or penalties — as long as you meet the important date. Your IRA custodian (the bank or brokerage holding your account) will not stop you from doing this, but they will report the transaction to the IRS, and the IRS will be watching to see if the money comes back.

The catch is timing and the one-per-year rule. You must return the exact amount within 60 days. If you return it on day 61, the entire withdrawal becomes taxable. If you are under 59½, you also owe a 10 percent early withdrawal penalty on top of income tax. And if you have already done a rollover from any traditional IRA in the past 12 months, you cannot do another one — the second attempt will be treated as a permanent distribution.

What happens if you miss the 60-day important date

Missing the important date is expensive. The IRS will treat the withdrawal as a permanent distribution, which means you owe income tax on the full amount at your regular tax rate. If you are under 59½, you also owe a 10 percent early withdrawal penalty.

For example, if you withdraw $10,000 from your traditional IRA and do not return it within 60 days, and you are in the 22 percent tax bracket and under 59½, you could owe $3,200 in taxes and penalties combined. That $10,000 withdrawal just cost you $3,200 in taxes alone, plus you have lost the money that would have grown in the account.

The IRS does not grant extensions on the 60-day window. If you are sick, out of the country, or dealing with a crisis, the important date still applies. There is a narrow exception called the "missed important date relief" provision, but it requires you to request a waiver from the IRS in writing, and approval is not may provide.

Roth IRA contributions versus earnings: what you can withdraw

A Roth IRA works differently. You cannot use the 60-day rollover trick because Roth withdrawals are treated differently by the IRS. However, you can withdraw the money you personally contributed at any time without penalty or taxes.

The key word is contributed. If you put in $5,000 of your own money, you can withdraw that $5,000 whenever you want. The earnings on that money — the growth and investment gains — must stay in the account until you are 59½ and have held the Roth for at least five years. If you withdraw earnings early, you owe income tax plus the 10 percent penalty.

This is useful if you have a Roth and need cash, but it is not borrowing. Once the money is out, you cannot put it back into that same contribution year. If you withdraw $5,000 in 2024, you cannot re-contribute that $5,000 to your 2024 limit. You would have to wait until the next year and use your new contribution room.

Why a 401(k) loan is usually better than an IRA withdrawal

If your employer offers a 401(k) plan, borrowing from it is often smarter than touching your IRA. A 401(k) loan lets you borrow up to 50 percent of your vested balance (or $69,000, whichever is less — this limit changes yearly). You repay the loan to yourself with interest, usually over five years, and the money keeps growing in your account.

The interest rate is typically the prime rate plus one percent, which is lower than a credit card or personal loan. More importantly, you are paying interest to yourself, not to a bank. The money stays in your retirement account and continues to grow.

The downside is that if you leave your job, you usually have to repay the loan within 60 days or it becomes a taxable distribution. But if you stay in your job and repay on schedule, a 401(k) loan is a cleaner option than an IRA withdrawal.

Other ways to access cash without touching retirement accounts

Before you use the 60-day rollover or withdraw from a Roth, consider whether you have other options. A personal loan from a bank or credit union, a line of credit, or a credit card cash advance may cost less in the long run than the taxes and penalties on an early IRA withdrawal.

If you are facing a genuine hardship — medical bills, foreclosure, or eviction — some employers allow hardship distributions from 401(k) plans without the 10 percent penalty (though you still owe income tax). Traditional IRAs do not have a hardship exception, but some states have laws protecting IRA funds from creditors, which means keeping money in an IRA can be safer than withdrawing it and holding it elsewhere.

If you are unemployed or between jobs, you may be able to deduct health insurance premiums from your IRA withdrawal without the 10 percent penalty. If you are a first-time homebuyer, you can withdraw up to $10,000 from a traditional or Roth IRA for a down payment. These are narrow exceptions, but they exist.

The one-per-year rule and how it applies across multiple IRAs

The IRS counts the 60-day rollover limit across all your traditional IRAs combined, not per account. If you have three traditional IRAs and you do a rollover from one of them, you cannot do another rollover from any of your traditional IRAs for 12 months.

This rule changed in 2024. Before that, the limit was per account, which meant you could do one rollover per IRA per year. Now it is one rollover per person per year across all traditional IRAs. Roth-to-Roth rollovers have their own separate one-per-year limit, and rollovers between traditional and Roth IRAs (conversions) do not count against this limit.

If you accidentally do two rollovers within 12 months, the second one is automatically treated as a taxable distribution. The IRS does not give you a do-over, so tracking your rollover date is critical if you think you might need to use this option.

Frequently Asked Questions

What is the difference between a rollover and a withdrawal?

A withdrawal is permanent — the money comes out and you keep it. A rollover is a temporary move where you withdraw money and return it to a retirement account within 60 days. If you complete the rollover, the IRS does not count it as a distribution. If you do not return the money in time, it becomes a withdrawal and you owe taxes.

Can I borrow from my IRA if I am self-employed?

The 60-day rollover rule applies to all traditional IRAs regardless of whether you are self-employed. A SEP-IRA or Solo 401(k) may offer loan options that a regular IRA does not, so check your plan documents. If you have a Solo 401(k), you may be able to borrow from it the same way you would from an employer 401(k).

If I do a 60-day rollover, do I have to report it to the IRS?

Your IRA custodian reports the transaction to the IRS on Form 1099-R. You do not need to do anything special if you complete the rollover on time. If you do not return the money within 60 days, the IRS will see the distribution and expect you to report it as income on your tax return.

Can I borrow from my IRA to pay off credit card debt?

Technically yes, using the 60-day rollover, but it is risky. If you miss the important date or cannot repay within 60 days, you will owe taxes and penalties on top of the debt you were trying to escape. A personal loan or balance transfer card is usually safer because you have a longer repayment window and you know the exact cost upfront.

What happens to the money in my IRA while I am using the 60-day rollover?

Once you withdraw the money, it stops growing. If the market goes up during those 60 days, you miss out on those gains. If the market goes down, you avoid the loss. When you return the money, it goes back into your account at whatever value you return it at — you do not get to reclaim any growth you missed.