Roth conversion
I’m 61 and converted my ira to a roth IRa. When can I access the funds that I converted? I know I can’t touch the earnings for 5 years, but since I paid taxes on the converted funds, can’t I access right away?
at age 72 I am planning to convert my Roth 401k to a Roth IRA to avoid RMDs. Does that trigger another 5 year hold on withdrawals?
Yes, unless you already have a Roth IRA. Even if the Roth IRA is new, if your Roth 401k is qualified (5 years), then the entire new balance rolled into the Roth IRA can be withdrawn tax free. Note – to avoid an RMD from the Roth 401k, you must roll it over prior to the year you reach 72, unless you are still working for that employer.
Permalink Submitted by Alan - IRA critic on Tue, 2022-02-15 21:34
Assuming that this conversion was your first Roth contribution of any type, you can withdraw the amount converted anytime you wish without tax or penalty. At this point you probably have not generated much in earnings, but you are correct that if this is your first Roth contribution (conversion), any earnings generated in the account will be subject to tax but no penalty if withdrawn before the 5 years has been completed. If your conversion was in 2022, the 5 year clock started 1/1/2022, and if it was in 2021 the clock started 1/1/2021.