Help with an IRA PLEASE!!!?

I have an HR Block easy IRA. It's a Roth account. The tax lady said I couldn't touch it for 5 years and after that, I could withdraw whenever I want. Now, I believe someone said I couldn't touch it until I'm 59 1/2 and if I do, I will be severely penalized. Can anyone give me any advice in regards to this? Should I keep investing? When can I actually touch the money? Is this a good account or did I make a mistake?

You did not make a mistake!

First to clarify, you can take out the "contributions" on your Roth any time you need the money without penalty and taxes. However, this is not for a down payment on the house or anything, but if you are really in a bind since you cannot put the contributions back.

Yes, you can take out your "earnings" on your Roth after five years and until you are 59 and a 1/2 to avoid taxes and penalties. If you take out those earning prior to meeting those two conditions, you will have to pay taxes on the money you withdraw, plus a 10 percent federal early-withdrawal penalty tax if you are under 59 and a half years of age, and a state penalty as well.

A Roth IRA is an excellent retirement fund, because like I said you can take out your contributions (just not your earnings) if you really need the money (lay-off, illness) and not face any taxes or penalties. Keep investing in it. Look at some good mid-cap to large cap mutual funds your portfolio and stick with it. You'll be much happy when you can retire earlier.

Keep investing. Roths are great because of their tax benefits. 591/2 is when it will be fully available because it is a retirement fund. If you want short term investments, try mutual funds but it would really benefit you to leave the ira alone. In fact, add as much as you can to it.

A Roth IRA is a great investment unless you need the money in the short-term. It is better to keep your money in the Roth IRA until 59 1/2. However, you can take your contributions out any time after 5 years without penalty. For example, if you contributed $4,000 and the account has grown to $6,000 in 5 years. You can take the $4,000 out any time after 5 years without penalty, but may have a 10% penalty on any amounts you take out over $4,000. For short-term savings set up a savings account. For long-term savings keep investing in your Roth IRA. Good luck!

The ROTH IRA is really just a vehicle for your investment. So whether you made a mistake or not depends on the investments that you are holding within the IRA. If you are holding CD's or other low interest assets then you may want to switch your IRA to a company like Vanguard, Scottrade, etc. Then you will be able to invest in stocks and mutual funds, where your money can work for you. Again, the IRA is great, but merely a holding vehicle. You need to make sure that you put the right investments in that vehicle.

You can withdraw your contributions at ANY TIME for ANY REASON--no need to wait 5 years. It's just the gains you need to wait 5 years and after age 59 1/2 to withdraw (or else pay taxes & penalties). Also, if you do make a withdrawal, you CAN put it back as long as you do it within 60 days.

Roths are great because all the gains that you've accumulated over the years will be TAX-FREE when you finally take qualified distributions. No other retirement vehicle gives you that advantage. A Roth is definitely not a mistake for most people.

Consider it the " luckiest" mistake you ever made! If it is a strain for you right now...that is hard to take, but it will really amount to something in years to come...and when you DO take money out it will be tax- free. It is a darn shame the "tax-lady" didn't do a better job explaining....but you will come to thank her someday.
If you are unhappy with the whole H.R.Block thing...you can call Fidelity and talk to a rep and transfer your account to them...they will give you info and advice on putting that money where it will grow...and maybe setting up a plan that you can eventually add a little more every so often....investing, retirement savings, that's THEIR biz...not taxes.