The pro-rata rule dictates that when an IRA contains both non-deductible (after-tax) and deductible (pre-tax) funds, then each dollar withdrawn (or converted) from the IRA will contain a percentage of tax-free and taxable funds based on the ratio of after-tax funds vs. the entire balance in all your IRAs. When there is a mix of pre- and after-tax dollars, you cannot withdraw (or convert) just the non-deductible funds and pay no tax.
Question:Recently, I’ve received dozens of emails suggesting that traditional IRA owners can convert to a Roth IRA and somehow avoid all or some tax. Is this a scam?Thank you in advance.
Thank you for all you do to educate the public. I’m hoping you guys can settle a debate that’s been going on with a few financial advisors and CPAs regarding the 5-year rule for Roth IRA conversions. I was under the impression that a non-taxable conversion can be withdrawn at any time, even within 5 years of the "backdoor" contribution/conversion, without a 10% penalty.
Question:Since I retired in 2020, each year I have been converting amounts from my employer plan to my Roth IRA. I will be age 73 in 2026. Can I take my required minimum distribution (RMD) amount and convert that to my Roth IRA?
While most distributions from a Traditional IRA are taxable, sometimes distributions can include after-tax dollars. These after-tax dollars are known as “basis.” Handling and tracking basis in your Traditional IRAs can be challenging, but it is important to get it right. If mistakes are made, double taxation can occur. That is a result no IRA owner wants.
Question:At age 71, I’m not yet subject to required minimum distributions (RMDs) from my IRA or workplace retirement accounts. However, I am required to take annual RMDs from a pre-2020 inherited IRA and a pre-2020 inherited Roth IRA.
Question:My wife turns 73 years old in August 2025. My understanding is that she has until April 1, 2026, to take her first required minimum distribution (RMD), in which case she would wind up taking two RMDs in 2026.
Question:Hi,In a recent blog post, you addressed the complicated rules for a 401(k) to Roth IRA rollover. I have a similar question as it relates to a pre-tax IRA conversion to a Roth IRA.
Hello,If a person is turning 73 years old in March, s/he would be required to take required minimum distributions for the year. Can a person do Roth Conversion prior to turning age 73 (say in February)? Does the first money out rule still apply?
Question:I just inherited an IRA from my sister. She died at age 74 and I am age 78. Am I required to use the 10-year rule, or can I stretch distributions from the inherited account over my life expectancy? I am hearing conflicting information as to what my options are.
