Roth conversions reaching 5 years old
I am 68 years old & my roth conversions have or are reaching 5 years old. Can I combine them into one account as they mature? What are the pros and cons of doing this, if I can?
Thanks and have a FANTASTIC day!!
Kristina / Jim
Permalink Submitted by Alan Spross on Fri, 2011-03-25 20:56
There is no downside of combining these into one account. For tax purposes all your Roth IRA accounts are treated as one combined account anyway. Keeping conversions in separate accounts has advantages until the recharacterization deadline has passed, but not afterwards.
One exception to that might be direct employer plan conversions or conversions of a rollover IRA that would be considered rollover accounts for purposes of federal bankruptcy protection limits. If you are in a state that does not provide broad creditor IRA protection for IRAs such as CA, having unlimited protection for rollover accounts is a benefit. Otherwise the limit is 1mm plus inflation for contributary IRA accounts.