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Old 12-08-2022, 03:14 PM   #21
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Can Roth conversions be done penalty free before age 591/2?
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Old 12-08-2022, 03:36 PM   #22
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Can Roth conversions be done penalty free before age 591/2?
"The 10% premature distribution penalty does not apply to assets that you convert to a Roth IRA, even if you convert the assets before reaching age 59. Any amount distributed that is not converted (for example, funds used to pay your tax bill) may be subject to the 10% premature distribution penalty."


https://www.rbcwm-usa.com/resources/file-687765.pdf

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Old 12-08-2022, 04:06 PM   #23
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Can Roth conversions be done penalty free before age 591/2?
There is an Rule of 55 opening for converting 401Ks to Roth after age 55 without a penalty if your 401K plan allows it. IIRC you have to not be working at the 401K plan sponsor at the time.
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Old 12-08-2022, 05:35 PM   #24
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I don't have dates on the original accounts that were rolled out and closed as I moved about the country. The only one I can document is the last one. I doubt the IRS will just take my word for it.
no paperwork from the first ROTH , or a tax form with the account number (and year on it ) ??

I'm so un-neat I have tons of old papers and tax forms going back decades (do have to keep tax forms for certain physical long term investments.)
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Old 12-09-2022, 09:46 AM   #25
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The rule only applies to the earnings when they are removed from the Roth IRA. Changing investments inside the Roth are not affected by these rules.
Thank you, Spock and VanWinkle.
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Old 12-09-2022, 05:31 PM   #26
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You cannot pay taxes due on the Roth conversion from the 401k if under 59 1/2 without paying a 10% penalty. The common method for avoiding the penalty is to setup an account with the IRS to make estimated quarterly tax payments.
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Old 12-09-2022, 05:34 PM   #27
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Thank you all. Very helpful.
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Old 12-16-2022, 04:49 PM   #28
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This is the only part that I need to know as our Roths are very old and we are over 59 1/2. Even if we are doing 401k conversions the next few years.

Step 5. Aim for qualified distributions of earnings. Earnings are not subject to tax if the distribution is a qualified distribution. Your distribution is qualified if it is made after you have owned any Roth IRA account for five years AND you are over the age of 59, or are dead, or disabled, or taking the funds for a first-time home purchase.


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