A qualified distribution is a withdrawal from a retirement account, like a Roth IRA or Roth 401(k), that meets IRS requirements and is therefore completely tax-free and penalty-free. To qualify, you generally need to be at least 59½ years old and have held the account for at least five years.

Meeting these requirements is the payoff for years of patience. Because you contributed after-tax dollars to a Roth account, a qualified distribution means you get to enjoy that growth without owing the IRS a cent, making it one of the most powerful benefits of Roth-style accounts.