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Old 07-30-2015, 04:39 PM   #41
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And I believe the 5-year timer starts with the first Roth conversion and it's a one time hurdle. This could be a reason to go ahead with a Roth early in order to start the timer running.
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Old 07-30-2015, 04:59 PM   #42
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And I believe the 5-year timer starts with the first Roth conversion and it's a one time hurdle. This could be a reason to go ahead with a Roth early in order to start the timer running.
Thanks misanman. I wanted to wait to do the conversion until I retire, in order to take advantage of the 15% bracket. It's the only time it would make sense for me.

In all likelihood I will probably end up satisfying the 5 year requirement, because conventional wisdom says to withdraw from Roths last anyway.
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Old 07-30-2015, 05:33 PM   #43
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And I believe the 5-year timer starts with the first Roth conversion and it's a one time hurdle. This could be a reason to go ahead with a Roth early in order to start the timer running.
There's a 5-year timer for each conversion you do. Granted, once you reach 59 1/2, I don't think it matters as much. I believe the 5-year hold on conversions is mostly to prevent folks from dipping into rolled over funds right away.

e.g. At 30 years old, you convert $20K (50/50 contribution/earnings split) to Roth and at 33yo, you convert another $20K (50/50 split again). At 35yo, you can withdraw $10K (contrib from 1st conversion) without 10% penalty but you still have to wait until you're 38yo before you can withdraw an add'l $10K (contrib from 2nd conversion) without 10% penalty.
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