5 year Roth Conversion
Client age 64. Completed a Roth conversion. The conversion of 15,000 were the first dollars into the Roth IRA. Opened the Roth IRA in 2022.
I don’t believe the 5 year rule would apply to each conversion, in this case, correct? How about earnings? For instance, she wouldn’t have to wait 5 years to withdrawal her principal and earnings on the 15K converted amount, correct?
Permalink Submitted by Alan - IRA critic on Thu, 2023-01-19 19:09
Client can withdraw the 15,000 anytime without tax or penalty. However, any gains (which come out last) would be subject to tax if distributed prior to 2027, when the entire Roth would become qualified and completely tax free.