mj107.......new info from fairmark.com pro.
I knew that if you had a Roth consisting of just contributions and earnings (no conversions) you could withdraw the RMDs after the owner's death and not pay a penalty because the RMD is about 4% at age 70 and there is no way you could withdraw enough to start withdrawing earnings (contributions come out first) if the Roth was not yet 5 yrs old and you were only taking RMDs.
I was worried that if you started the first Roth w/ a conversion and the death of owner occurred shortly thereafter, the 5 yr clock for Roth conversion would cause a penalty on RMDs because they were considered to be from the conversion. However, this link suggests that
the 5 yr clock for Roth conversions is cancelled by the owner's death...
(for the conversion part only). The clock continues for earnings. However if the beneficiary is only withdrawing RMDs, again there is no way to withdraw enough to start withdrawing earnings (the conversion amount comes out first) within the first 5 yrs. Hopefully this makes sense......it's a bit complex.
Fairmark Forum :: Retirement Savings and Benefits :: Inherited Roth.....RMDs & 10% penalty
I knew that if you had a Roth consisting of just contributions and earnings (no conversions) you could withdraw the RMDs after the owner's death and not pay a penalty because the RMD is about 4% at age 70 and there is no way you could withdraw enough to start withdrawing earnings (contributions come out first) if the Roth was not yet 5 yrs old and you were only taking RMDs.
I was worried that if you started the first Roth w/ a conversion and the death of owner occurred shortly thereafter, the 5 yr clock for Roth conversion would cause a penalty on RMDs because they were considered to be from the conversion. However, this link suggests that
the 5 yr clock for Roth conversions is cancelled by the owner's death...
(for the conversion part only). The clock continues for earnings. However if the beneficiary is only withdrawing RMDs, again there is no way to withdraw enough to start withdrawing earnings (the conversion amount comes out first) within the first 5 yrs. Hopefully this makes sense......it's a bit complex.
Fairmark Forum :: Retirement Savings and Benefits :: Inherited Roth.....RMDs & 10% penalty