Roth 5 year rule – info seems contradictory
I thought I understood the “5-year rule” regarding Roth rules, but I recently read something that made me question my understanding. After further research it seems like the information contradicts each other so I would appreciate feedback on my situation:
Roth’s contributions started in 2012 for the next 6 years
Roth conversion began in 2019, 2020, and 2021
I’m 66 years old
So the question is do I have to wait to withdraw any of the funds in my Roth? If so, please elaborate
Thx in advance for any and all feedback!!
Permalink Submitted by Alan - IRA critic on Sun, 2022-05-15 15:03
Your Roth IRA is fully qualified and all distributions will be tax and penalty free. Your Roth first became qualified on 1/1/2017, which is when you held your Roth 5 years (all contributions treated as made on 1/1) and you were also 59.5 by then. There are two 5 year holding requirements for a Roth IRA, the first relates to when your Roth becomes qualified as indicated above. The second is for each conversion to be withdrawn without the 10% penalty, but these holding periods all end at 59.5. Since you were already 59.5 when you converted, none of these holding periods apply to you. Finally, you do not need Form 8606 to report any distributions, they go directly on line 4a of Form 1040 only.
Permalink Submitted by Ken Maier on Sun, 2022-05-15 17:56
Thank You!! I appreciate it