Conversion from Traditional IRA to Roth IRA
I am 62, have had a Roth IRA for 20 years, and wish to do a conversion from my traditional IRA to my Roth IRA. Also I wish to withdraw this money from the Roth IRA in 10 months. Please clarify that the 5-year rule does not apply. ie. After paying my tax on the conversion, I am free to withdraw the Roth IRA funds in 10 months without any penalty or future tax bill.
Permalink Submitted by Alan - IRA critic on Fri, 2021-12-17 16:45
Yes, because your Roth IRA is qualified, you no longer have any holding periods. The entire account balance regardless of the type of contribution, including earnings can be distributed anytime you wish tax and penalty free. This planned conversion, if done this year will accelerate your taxes into 2021, but will be tax free when distributed.