How to Borrow Against a Roth IRA

Get the cash you need from your own IRA.

Get the cash you need from your own IRA.

When you need a significant sum of money, your first thought may be to borrow against money you already have. If you have an individual retirement account, you may be tempted to you take an early withdrawal, but the taxes and penalties make this an unattractive choice. However, under certain circumstances, you can "borrow" the money from your IRA for a short-term period only, as long as you will be able to redeposit the funds in an IRA within 60 days.

Understand that you won't be able to take a traditional loan from your IRA. The Internal Revenue Service does, however, have guidelines that allow you to work around this by withdrawing the money you need and either replacing it in the same IRA or a new IRA within 60 days. When you use this workaround method to borrow money from an IRA, it is called a rollover distribution.

Fill out the form the IRA company that controls your account requires for withdrawal requests. You will likely have to provide basic identifying information, such as your account number, social security number and address.

Spend the money you have withdrawn from your IRA as you wish. Use it for a home purchase deposit, a dream vacation or even that snazzy new car you've been eyeing. Make arrangements to borrow or otherwise accumulate the sum to be redeposited into an IRA within 60 days.

Deposit the amount you borrowed into an IRA within 60 days of your withdrawal. You can deposit the funds into the account from which you withdrew the money or an entirely new account.


  • If you return the money you withdrew from your IRA within 60 days, you won't have to pay taxes on it. However, you will still have to report the distribution to the IRS. Use either IRS form 1040 or 1040A to report it.
  • You can only take a rollover distribution once in a 12-month period. If you need to take a temporary loan from your IRA sooner than that, you will need another source of cash.


  • Don't miss the deadline for depositing the funds you withdrew into an IRA. If you fail to make the deadline, your withdrawal will count as a distribution and you will face taxes and penalties.

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Jordan Meyers has been a writer for 13 years, specializing in businesses, educational and health topics. Meyers holds a Bachelor of Science in biology from the University of Maryland and once survived writing 500 health product descriptions in just 24 hours.

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