CONSOLIDATING MULTIPLE ROTH IRAS AND THE 5 YEAR RULE
I have been converting portions of my traditional IRA yearly into separate Roth IRAs for 4 years. I started converting after age 60 but I was confused about how the 5 year rule would apply to each conversion so I figured the way to keep track of the five year histories was creating a new Roth account each year. Can I just consolidate all these Roths and any new conversions into the same single Roth IRA account and forget about the 5 year rule?
Permalink Submitted by Alan - IRA critic on Thu, 2019-12-12 22:28
Yes, you can. The 5 year holding period for conversions to avoid the 10% penalty upon withdrawal ends at 59.5. There is also a 5 year holding period for your Roth to become qualified, meaning that all earnings would be non taxable. If your first Roth contribution was prior to 2015 (prior to 2016 as of 1/1/2020) your Roth is now fully qualified and totally tax and penalty free.