Roth IRA rollovers and conversions for those over 59 1/2

Submitted by Mike Tanner on Mon, 2022-08-15 17:41

Can a retiree over age 59 1/2 rollover his employer’s Roth 401(k) amount into a new, private Roth IRA without having to start the 5 year clock over again?

If not, and the clock must re-start, can the principle, or basis, be withdrawn without penalty prior to 5 years? What about the earnings?

Slight variation:
How does the 5 year clock work if a retiree over age 59 1/2 converts a private conventional IRA to a Roth IRA in installments (ie. some each year)? What are the penalties if some is withdrawn prior to the 5-year wait?



Submitted by Alan - IRA critic on Mon, 2022-08-15 18:13

  • With respect to the Roth 401k direct rollover, if the Roth 401k had been held 5 years, because you are over 59.5 it would be qualified. While the 5 year holding period starts over for your new Roth IRA, the entire Roth 401k rollover including it’s earnings will be treated as regular Roth IRA contributions, available for withdrawal anytime with no tax or penalty. If your Roth 401k is not yet qualified, only your Roth 401k contributions (shown on Form 1099R) are available without tax or penaly. The earnings would have to wait until your Roth IRA becomes qualified.
  • For TIRA conversions done each year, the converted amount is available anytime without tax or penalty (being over 59.5). But any earnings on the conversions must wait 5 years to be available tax free. There is never a penalty after 59.5. You will need a Form 8606 to report all Roth IRA distributions until your Roth IRA is qualified so you will need to track Roth IRA regular and conversion basis in order to file the 8606.

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