Given that contributions were being made under one set of tax laws, I think one could make the case that changing the laws regarding those contributions is ex post facto.
But, I would expect the change to be made for future withdrawals. One could also make the case that is not. I don't agree, but I'm guessing that the Democrats could find a judge that would accept that.
I'm in a strange situation: I'm not yet old enough to make a Roth IRA withdrawal without penalty. But, I think the penalty is 10%. That would likely be less than my marginal income tax rate, either now or in the future. So, if Congress did indeed change the law on Roth withdrawals, it might be better to cash out now.
However, even if I were to reinvest the assets in a non-qualified investments, I would miss out on deferring income taxes on the realized gains between now and when I originally planned to withdraw them.
The truth is: I think the worst Congress could do is turn prior contributions to Roth accounts into the equivalent of non-deductible contributions to traditional IRAs. And while it's not ideal, it's still better than no tax deferral at all.
I think it would be illegal to change the rules on already invested funds.
That may not stop DC but I think that’s the precedent.
You can withdraw the contributions from a Roth IRA without penalty as long as you've met the 5 year vesting period. Any earnings withdrawn prematurely would be subject to tax and penalty.