Roth IRA Withdrawal Rules
I started contributing to a Roth IRA in 2011 and began yearly Roth IRA conversions in 2014. I am 64 years old and plan on continuing with the conversions for the next 5-6 years. Everything is in the same Roth IRA, and I am wondering if I should begin creating a new account for each annual conversion. The 5-year withdrawal rule is still unclear to me. Which amount can be withdrawn at what time? Would the the principal withdrawal dates be different than the earnings withdrawal dates? Does it make sense to have a separate Roth IRA for each year? Would that make it simpler to figure what can be withdrawn when? I plan on another conversion before 12/31 and would appreciate any clarification on this matter. Thank you.
Permalink Submitted by Alan - IRA critic on Mon, 2020-12-21 18:36
Because your Roth IRA is qualified (5 years since first contribution and you have reached 59.5), all distributions you take at anytime are tax and penalty free. You no longer have any 5 year holding requirements, and additional IRA accounts are not necessary. You could convert more this year and withdraw your entire conversion and any earnings anytime tax and penalty free. And you no longer need to complete Form 8606 to report any Roth distributions, although you will need it to report conversions.
Permalink Submitted by Peter Karakondis on Mon, 2020-12-21 19:20
Thank you so much for replying so quickly. So, since I am 64, and I started contributing to a Roth IRA over 5 years ago, I can withdraw any amount from any contribution or conversion, including earnings, at any time? Is it that simple? Thanks again.
Permalink Submitted by David Mertz on Mon, 2020-12-21 19:20
Yes, it’s that simple.
Permalink Submitted by Peter Karakondis on Mon, 2020-12-21 19:22
Great, thanks!