Roth IRA Conversion Rules over 59 1/2
- A client has had their Roth IRA open for 6 years. If a client is over 59 1/2 and they convert an IRA to a Roth IRA , can they access the conversion amount and earnings without a penalty and tax free, or do you still have to wait five years?
- Does the answer change if the IRA has only been open for 4 years when the conversion is completed and the client is still over 59 1/2?
Permalink Submitted by Anthony Perrone on Tue, 2025-05-06 09:13
2. is supposed to say Roth IRA**
Permalink Submitted by Alan - IRA critic on Tue, 2025-05-06 10:10
Q 1 – the Roth is qualified and the entire balance can be withdrawn tax and penalty free.
Q2 – In this case, until the Roth has been held 5 years, the distribution of earnings would be taxable and would come out last, but there is no 10% penalty because owner is over 59.5. All conversion 5 year holding periods end at 59.5.
Permalink Submitted by Anthony Perrone on Tue, 2025-05-06 13:57
If the client is 61 and sets up a brand new Roth IRA and converts their IRA, can they access the conversion amount and earnings without a penalty and tax free, or do you still have to wait five years?
Permalink Submitted by Alan - IRA critic on Tue, 2025-05-06 14:23
They can withdraw the converted amount tax and penalty free any time, but the earnings will be taxable (no penalty) until 5 years has passed. Earnings come out last.