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Roth conversion counts as part of 72t distribution???
Old 12-28-2020, 03:07 PM   #1
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Roth conversion counts as part of 72t distribution???

My 401K plan won't allow rule 55 early withdrawals, so I am thinking of setting up a 72t distribution from 1 IRA account as an option to get pretax $ before age 59.5 . My question is if I do a Roth conversion from the 72t account in some years, would that count as a 72 distribution? I think the answer is no, but I am not sure. Thanks in advance for all replies.
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Old 12-28-2020, 03:17 PM   #2
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It would break the 72(t) and you'd be liable for penalties.

Also, if you read the rules on Roth conversions, they specifically say that you cannot use 72(t) distribution money as a source for Roth conversions.

Basically if you start a 72(t) on any account, you can't do anything else with that account except the 72(t) distributions until the SEPP is done.
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Old 12-28-2020, 11:55 PM   #3
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OP - no.
If you are considering a 72t , be sure to divide your IRA , so you have one that you can take out extra money and not break the 72t (the penalties are enormous).
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Old 12-29-2020, 03:56 PM   #4
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Thanks both SC521 and Sunset. I need to forget that idea of mine
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