5 year old Roths
I am 68 years old, live in Rochester, NY and my roth conversions have or are reaching 5 years old. Can I combine them into one account as they mature?
Does the government allow this?
Is there any paperwork trail that must be followed?
Permalink Submitted by Alan Spross on Sat, 2011-03-26 19:13
You can combine them, and your Roth accounts are considered combined anyway for tax purposes. There is an advantage in simplifing recharacterizations if you keep the conversions separate until the recharacterization deadline has passed, and that is only 10 months after the year of your conversion.
Since you are over 59.5 and your first Roth contribution or conversion took place prior to 2007, all your Roth IRAs are now qualified and tax free. Distributions are also much easier to report as you no longer need Form 8606 unless you did a 2010 conversion.
When you combine the accounts, try to use a direct transfer process so you do not run afoul of the rollover limit of one per year per account.