5 year with re: Roth IRA’s

Does the 5 year wait begin on Jan 1 of the year you open a Roth IRA? Instead, is it exactly the 5 years to the date you open the account? For example, if I opened a Roth IRA on Sept 1, 2004…does the 5 year period expire Jan 1, 2009 or Sept 1, 2009?



Dave.Summit,

Yes the 5 year period for ROTH IRAs begins on January 1 of the year you open the Roth IRA. And as long as you keep a ROTH IRA, you will have met that 5 year owning period for all of your ROTH IRAs.

Do not confuse this with the 5 year requirement on conversions.
Each Traditional to ROTH Conversion has it’s own 5 year clock. The Conversion 5 year clock also begins on January 1 of the year of conversion.



And note that the taxable year for which you contribute to a Roth counts for purposes of the 5 year period.

Example: You make a 2007 Roth contribution on 4/1/08. But the 5 year period starts on 1/1/07. You get credit for 15 months prior to the actual date of contribution.



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