Access to Roth Conversion Funds
I opened a Roth IRA about 10 years ago. For each of the last 2 years I have done a $50,000 conversion from my Rollover IRA to the existing Roth account which only had a balance of about $1500 at the time of the first conversion. I’m getting conflicting information as to when I can access the conversion funds. I’ve heard I must wait 5 years from the date of each conversion to access those funds. This doesn’t make sense as I have fully paid the taxes due with each conversion. I believe I should be be able to access them at any time as the account has been open more than five years. I am 63 years old and will stop converting if I lose acces to the funds for 5 years. Thanks.
Permalink Submitted by tomd37 on Sun, 2013-05-26 16:21
I believe you qualify for a couple of reasons. First, your initial Roth IRA was opened more than five years ago and is now qualified. Second, you are over the age 59.5.Therefore, I believe you can access any of the funds, initial or conversion without any delay and without tax or penalty of any type. Let’s see what other more qualified persons (e.g., Alan S) have to say. Tom D.
Permalink Submitted by Alan - IRA critic on Sun, 2013-05-26 23:30
Tom is correct. Your Roth IRA is fully qualified meaning the entire balance is available for distribution tax and penalty free. You never did have to wait to access the funds, but before your Roth was qualified pulling conversion money out held under 5 years would result in a 10% early withdrawal penalty. But all this ended when you reached 59.5.