Permalink Submitted by Alan Spross on Tue, 2009-03-03 20:24
There are two different 5 year holding periods affecting Roth distributions.
The first starts with the first Roth contribution year and is a requirement along with reaching age 59.5 for the Roth to be qualified. This means that the earnings are tax free when distributed. This holding period applies no matter what age the first Roth contribution is made.
The second, and probably the one you are referring to applies to each conversion with respect to the early withdrawal penalty if the conversion amount is withdrawn. This one does totally end at age 59.5. There are no early withdrawal penalties after age 59.5 with the exception of a busted 72t plan.
If a conversion is completed after age 59.5, the converted amount can be distributed anytime without an early withdrawal penalty, even the next day.
Permalink Submitted by Alan Spross on Tue, 2009-03-03 20:24
There are two different 5 year holding periods affecting Roth distributions.
The first starts with the first Roth contribution year and is a requirement along with reaching age 59.5 for the Roth to be qualified. This means that the earnings are tax free when distributed. This holding period applies no matter what age the first Roth contribution is made.
The second, and probably the one you are referring to applies to each conversion with respect to the early withdrawal penalty if the conversion amount is withdrawn. This one does totally end at age 59.5. There are no early withdrawal penalties after age 59.5 with the exception of a busted 72t plan.
If a conversion is completed after age 59.5, the converted amount can be distributed anytime without an early withdrawal penalty, even the next day.
Permalink Submitted by Paul McCollum on Tue, 2009-03-03 21:00
Thank you very much!