Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 08-04-2022, 10:48 AM   #101
Recycles dryer sheets
 
Join Date: May 2018
Posts: 94
Does the 5 year period go away at 59.5yo for someone who has never had a Roth? My understanding is that IF you have never had a Roth then you must wait the 5 full years after opening your first Roth even if you are over 59.5yo. Prior to the 5yr mark and over 59.5yo lets you withdraw your contributions tax and penalty free but not the earnings. A first Roth starts the clock and once 5yrs pass then no other 5yr rules apply after 59.5. Kitces has a good article on this subject.
monte1022 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 08-04-2022, 12:55 PM   #102
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 19,237
Quote:
Originally Posted by monte1022 View Post
Does the 5 year period go away at 59.5yo for someone who has never had a Roth? My understanding is that IF you have never had a Roth then you must wait the 5 full years after opening your first Roth even if you are over 59.5yo. Prior to the 5yr mark and over 59.5yo lets you withdraw your contributions tax and penalty free but not the earnings. A first Roth starts the clock and once 5yrs pass then no other 5yr rules apply after 59.5. Kitces has a good article on this subject.
The 10% early withdrawal penalty goes away if you are over 59.5. The taxation of earnings withdrawn prior to 5 years does not go away. As with many things, it doesn't affect me, so I don't have personal knowledge, but that's the way I read the regulations.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Old 08-04-2022, 01:32 PM   #103
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 3,096
Quote:
Originally Posted by monte1022 View Post
Does the 5 year period go away at 59.5yo for someone who has never had a Roth? My understanding is that IF you have never had a Roth then you must wait the 5 full years after opening your first Roth even if you are over 59.5yo. Prior to the 5yr mark and over 59.5yo lets you withdraw your contributions tax and penalty free but not the earnings. A first Roth starts the clock and once 5yrs pass then no other 5yr rules apply after 59.5. Kitces has a good article on this subject.
Yes, you are correct.

Per IRS Pub 590-B:

A distribution is qualified if both of the following are true:
- It is made after the 5-year period beginning with the first tax year for which a contribution was made to a Roth IRA set up for your benefit.
- The payment or distribution is made on or after the date you reach age 59 1/2
cathy63 is offline   Reply With Quote
Old 08-04-2022, 01:47 PM   #104
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 4,350
Quote:
Originally Posted by G-Man View Post
Overthinking comes from being in IT for over 30 years. Sorry for all the questions.

Questions are good. Never apologize for them!
Dash man is offline   Reply With Quote
Old 08-06-2022, 12:41 PM   #105
Full time employment: Posting here.
 
Join Date: Jan 2016
Posts: 920
Quote:
Originally Posted by TheWizard View Post
Once you're over age 59-1/2, those five-year periods go away...



No not true. Our FA said with each conversion we will have a 5 year waiting period before we can withdraw principle. We are in our 60's.
meleana is offline   Reply With Quote
Old 08-06-2022, 12:48 PM   #106
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 4,350
Quote:
Originally Posted by meleana View Post
No not true. Our FA said with each conversion we will have a 5 year waiting period before we can withdraw principle. We are in our 60's.

Either you misunderstood your FA or he is wrong. You can withdraw principle because youíve already paid tax on that in the conversions and are over 59 1/2. What you will have to pay tax on is if you withdraw the earnings on those conversions that havenít had tax paid on them yet. After five years the earnings are tax free.
Dash man is offline   Reply With Quote
Old 08-06-2022, 12:50 PM   #107
Full time employment: Posting here.
 
Join Date: Jul 2014
Posts: 525
Quote:
Originally Posted by meleana View Post
No not true. Our FA said with each conversion we will have a 5 year waiting period before we can withdraw principle. We are in our 60's.
Perhaps it's time to get a new FA (or just Do It Yourself), because the FA is wrong.

If you don't believe the colored chart posted previously in this thread, see p. 31 of https://www.irs.gov/pub/irs-pdf/p590b.pdf regarding the non-taxation of "qualified distributions".
SevenUp is online now   Reply With Quote
Old 08-06-2022, 12:53 PM   #108
Full time employment: Posting here.
 
Join Date: Jan 2016
Posts: 920
Quote:
Originally Posted by SevenUp View Post
Perhaps it's time to get a new FA (or just Do It Yourself), because the FA is wrong.

If you don't believe the colored chart posted previously in this thread, see p. 31 of https://www.irs.gov/pub/irs-pdf/p590b.pdf regarding the non-taxation of "qualified distributions".

Well I'm thinking I probably misunderstood him.
meleana is offline   Reply With Quote
Old 08-06-2022, 01:02 PM   #109
Full time employment: Posting here.
 
Join Date: Jul 2014
Posts: 525
Quote:
Originally Posted by meleana View Post
Well I'm thinking I probably misunderstood him.
Or you don't look your age and he assumed you were under 59.5.
SevenUp is online now   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
multiple backdoor roth conversions in one year... Lazyfabs FIRE and Money 6 04-03-2021 08:09 AM
Can I do both Backdoor Roth IRA and Mega Backdoor Roth IRA? growerVon FIRE and Money 8 07-30-2015 01:04 AM
Should I move T-IRA into my active 401k and do backdoor ROTH IRA? dvalley FIRE and Money 6 01-17-2014 05:04 PM

» Quick Links

 
All times are GMT -6. The time now is 03:43 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.