ROTH CONVERSION
I have a client who is 59 1/2, we are looking to convert traditional IRAs to Roth. Would there be a 5 year wait before withdrawals can be made without penalty.
I have a client who is 59 1/2, we are looking to convert traditional IRAs to Roth. Would there be a 5 year wait before withdrawals can be made without penalty.
Permalink Submitted by Edward Czapor on Thu, 2008-06-12 16:36
No, since 591/2, there would be no 10% penalty on the converted amuunt or earnings. However, earnings would be taxable if a Roth has not been already established for at least 5 years. The tax consequences of the conversion should be considered. It may be better to convert lesser amounts over several tax years rather than all TIRA’s at one time.
Ed C.