Roth IRAs and 5 year rule

Submitted by Howard Patterson on Sun, 2021-05-16 19:09

How many Roth IRA accounts are you allowed to have and how does the 5 year rule apply to each? I turn 70 this year. Opened first Roth in 2015 with some traditional Ira money and then added to same Roth account in 2016. Opened a separate Roth in 2019 (inside 401k) then converted it to Roth outside the 401k in 2021. Plan to convert some more traditional Ira money to Roth IRA in 2021.



Submitted by Alan - IRA critic on Sun, 2021-05-16 22:15

The 5 year holding period for all Roths to be qualified starts 1/1 of the year for which your first Roth contribution is made. It does not matter how many accounts you have, although you can open as many as you wish. SInce you have already met the 5 year holding period and are over 59.5, all your Roths are fully qualified and tax free. You no longer have any holding period to meet.

Submitted by Maria Ku on Wed, 2021-05-19 23:18

are still subject to the 5-yr holding period before getting out of 10% penalty, aren’t they?

Submitted by Alan - IRA critic on Wed, 2021-05-19 23:41

No. Once a Roth is qualified, there is no longer a conversion holding period. To be qualified, the taxpayer must be 59.5, disabled or dead, and any of those would eliminate a conversion holding period penalty.

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