ROTH 5 year rule
I have the understanding that in order to access the gains tax and penalty free that you have to be BOTH over age 59.5 and have owned ANY ROTH for at least 5 years. Assuming, I’m correct does a ROTH with a zero balance count and what if you open a ROTH, have it for 3 years close it out and then open another ROTH and have it for 2 years. Does that count to the 5 year holding period? Also does the ROTH 401k count towards that?
Permalink Submitted by Alan - IRA critic on Mon, 2019-07-15 17:46
Holding period for a Roth 401k does not count as holding for a Roth IRA to attain qualification. Your Roth 5 year period starts with the first year you make a contribution (or conversion) and continues from there whether you close any or all of your Roth IRAs or not. But the 5 years cannot start on an excess contribution, it must be an allowed contribution. Also, note that total disability (or death) can be substituted for reaching age 59.5 if those events occur first.