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Roth Conversion Question
Old 04-18-2010, 06:46 AM   #1
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Roth Conversion Question

I am reading about Roth IRA conversions.

I read that there is a rule about conversions. If funds are converted to a Roth before the person is 59.5 years old... the converted funds need to be held for 5 years before withdrawal. There were some other rules regarding aggregation and ordering of withdrawals and potential tax on earnings if the rules are violated.

Does this mean if I convert some funds at 58, I will need to wait 5 years before there is penalty free access to those funds?

Does the 5 year rule hold for funds converted to a Roth IRA if they are converted after 59.5?

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Old 04-18-2010, 07:42 AM   #2
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my understanding was 59 1/2 or 5 years whichever comes first.

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Old 04-18-2010, 08:12 AM   #3
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Fairmark / Kaye Thomas is my go-to source for Roth info:

Distribution Overview

Note rules "Order of Distributions" and "Treatment of Distributions"

So to your question: It appears that you need to wait to 59.5 for there to be "penalty free access to those funds", but after age 59.5 there is no penalty. HOWEVER, "penalty free" does not mean "tax free". You may need to pay tax. It appears that no money is taxed twice though.
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Old 05-02-2010, 03:07 AM   #4
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Nice overview of Roth Conversion at the JFP
Roth Conversions: Pulling It All Together
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Old 05-02-2010, 07:45 AM   #5
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After you make your conclusion, for a feel-good confidence, I would ask at the retirement sub-forum at and see what Alan S. says. I believe that LOL is correct and you may have to pay taxes on the earnings if withdrawn before the oldest Roth is 5 yrs old even if you are over 59.5 y.o.
but it's easy to get confused so I would ask at the Fairmark forum.
Variables are age (<,> age 59.5); Roth age (<,> 5 yrs for earliest Roth, applicable conversion) and taxes, penalty.
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