Start new Roth IRA with with after tax (cash basis) funds from personal annuity
Would tax laws allow one to start a new Roth IRA using only the after tax dollars (now cash basis) used to fund an old existing personal retirement tax deferred annuity? If Yes, is there a limit on the amount of dollars to start the Roth IRA? I am retired, over 72 with only traditional pension, SS, and some interest and dividend income. Reason for the question – Roth IRA gains are not taxable and no RMD requirement.
Permalink Submitted by Alan - IRA critic on Thu, 2023-02-09 19:28
To be clear, is your current annuity an IRA annuity subject to RMDs, or a non qualified annuity?
Permalink Submitted by Beren Anderson on Fri, 2024-12-20 22:15
You could use this money to start a ROTH IRA.. But you would need to have w-2 or 1099 income in the year you want to create the ROTH IRA that is equal to the amount wanting to invest in the ROTH IRA, again up to the maximum of $8,000 in 2024 if over age 50. And from what you said as being retired it does not seems like you have these types of income so would say not eligible. But is not so much that the money is from the cost basis of an older annuity….its that you do not seem to have the type of income to be eligible to create a new ROTH IRA.
But as Alan mentioned could be eligible for a ROTH Conversion if the annuity was an IRA annuity. But with discussion of after tax monies being used from this annuity sounds to be a NON-Qualified annuity, and does not seem like you have an IRA annuity.