Is principal available after Roth Conversion
I have a client that converted $15000 from a T-IRA to a Roth in Sept of 2011. He is 48. Can he access the principal free of penalty?
I have a client that converted $15000 from a T-IRA to a Roth in Sept of 2011. He is 48. Can he access the principal free of penalty?
Permalink Submitted by Alan - IRA critic on Wed, 2013-08-14 23:12
No, he must wait 5 years to avoid the 10% penalty unless he has a penalty exception such as disability, higher education expenses, high medical costs or health insurance while unemployed. If his Roth conversion was not fully taxable due to basis in his TIRA from non deductible contributions, the non taxable part can be distributed without penalty with no 5 year waiting period, however the non taxable part is considered distributed only after the taxable part.