ROTH IRA AFTER AGE 591/2
If you open a Roth IRA after age 591/2 does the five year rule apply for distributions?
I have heard you can get back your contributions any time with out tax or penalty.
In other words what rules apply?
I had a Roth IRA previously but closed it down.
Thank you
Permalink Submitted by Alan Spross on Tue, 2012-02-14 16:47
The IRS has never clarified whether the 5 year holding period must start over if you fully distribute your Roth IRA, as you did. The tax code indicates that the 5 year period starts with the year of your first Roth contribution and does not mention what happens if your holding period is not continuous. Therefore, going strictly by what it says, your 5 year period will still begin in the year you first contributed.
There are TWO different 5 year holding periods. The one referred to above determines when your Roth is fully qualified and therefore tax free. The second one is for conversions to avoid the penalty. You can ignore this second one because it does not apply once you reach 59.5.
Any taxpayer can take out their own regular contributions at any time tax and penalty free. In your case, only the earnings are in question. Therefore, if your first Roth IRA contribution was in 2007 or earlier, your entire Roth IRA is qualified and tax free.