5 years rule for Roth IRA conversion
I will be permissible to convert traditional IRA and 401K during 2010, however I will turn 67 years and will need to ake RMD 2013, how does this 5 years rule affect my RMD?
I will be permissible to convert traditional IRA and 401K during 2010, however I will turn 67 years and will need to ake RMD 2013, how does this 5 years rule affect my RMD?
Permalink Submitted by Alan Spross on Tue, 2009-01-27 03:42
It does not affect your RMD at all, except that by converting prior to the start of your RMDs, they will be lower because you will have a lower balance in your traditional IRA as of 12/31/2012.
There is NO RMD requirement for your Roth IRA.
If you have after tax contributions in your 401k, consider first rolling over the pre tax amount to an IRA in a direct rollover, and then in 2010 converting the after tax amount directly to a Roth IRA. This direct conversion of after tax amounts will be tax free and will get the dollars into your Roth more tax efficiently than first rolling them to a traditional IRA.