What amount can Mary withdraw tax-free from her Roth IRA?

Mary can withdraw tax-free from her Roth IRA the amount she has contributed to the account, as well as any amounts that have grown tax-free, provided she meets certain conditions. In general, contributions to a Roth IRA can always be withdrawn tax-free at any time since contributions are made with after-tax dollars. Additionally, earnings can be withdrawn tax-free if the account has been open for at least five years and the individual is at least 59½ years old, or if certain exceptions apply.

In this case, assuming Mary has contributed amounts totaling $199,000 to her Roth IRA and meets the requirements for tax-free withdrawals, she can withdraw that entire amount without incurring any tax liability. This is particularly advantageous as it allows individuals to access their investment growth tax-free, as long as they follow the regulations surrounding the account.

Choosing the correct amount for tax-free withdrawal hinges on understanding these fundamental rules governing Roth IRAs, particularly the treatment of contributions versus earnings. Thus, the amount of $199,000 is accurate under the assumption that Mary has adhered to Roth IRA rules regarding contributions and timing.