Roth 5 year clock
Hi – I opened a small Roth 9 years ago and reached 59 1/2 last month. In the mean time I opened a much larger Roth that is under the 5 year requirement. If I close out the old small Roth will that mean the clock resets on the new one?
Thanks for your input.
Frank
Permalink Submitted by Alan - IRA critic on Tue, 2013-05-28 20:52
All your Roth accounts are now fully qualified and tax free. The 5 years starts with your oldest contribution. So you can either withdraw your first Roth account and the other one is still fully qualified, or you could transfer the old account value into the newer account. Either way, your 5 year clock started 9 years ago regardless of what you do now. There is a different 5 year holding period for Roth conversions, but those all end at 59.5 so would not affect you now even if you did a conversion last year.
Permalink Submitted by frank ridgway on Thu, 2013-05-30 15:24
Thanks very much!
Permalink Submitted by Julie Brangenberg on Fri, 2013-05-31 19:06
If you converted to a Roth IRA less than 5 years ago, and are over 59 1/2, do you have to wait the 5 years before taking out the earnings tax free?
Permalink Submitted by Alan - IRA critic on Fri, 2013-05-31 19:50
Yes, the earnings are taxable until the Roth is qualified and that happens when 5 years passes from the first contribution and you are 59.5.