BackDoor Roth Conversion
So if I do a backdoor Roth Conversion and I am over 59 1/2, does the 5 year rule apply to me, meaning I cannot take out any of the conversion funds for 5 years?
So if I do a backdoor Roth Conversion and I am over 59 1/2, does the 5 year rule apply to me, meaning I cannot take out any of the conversion funds for 5 years?
Permalink Submitted by David Mertz on Wed, 2022-12-07 21:10
The 5-year rule for conversions does not apply after age 59½. The 5-year rule for conversions only sets the deadline after which the distribution of conversion funds would not be subject to an early-distribution penalty, but there is no early-distribution penalty after age 59½. After age 59½ you can take out the converted funds at any time without tax or penalty. Even before age 59½, funds that were tax free at conversion (such as with a backdoor Roth), can be taken out at any time without tax or penalty (but only after funds that were taxable at conversion are taken out, which might be subject to penalty).