I am looking to purchase a business and most of my money is tied up in retirement accounts. I’m exploring the idea of withdrawing some funds from a Roth IRA.

I have about $70k in a Vanguard Roth IRA that is primarily from a 401k rollover from an old employer about 3 years ago. At that time it was about $50k and was mostly Roth 401k. I converted the traditional portion (about $10-15k) to Roth that same year (2018) and paid the taxes on it so the whole $50k could grow tax free. Each year prior I would convert a portion of my traditional 401k (including company match) to Roth 401k, usually about $10k a year to avoid a big one-time tax hit.

I know that in general you can withdraw Roth IRA contributions without any penalty and taxes. After all, it’s after-tax money. However, in looking through the IRS rules (Publication 590-B) there’s a 5-year rule and since I rolled over my Roth 401k to a Roth IRA less than 5 years ago, I’m not sure if I can withdraw any of that money without paying a penalty or taxes. Any tax experts out there that can weigh in?

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