Converting IRA to Roth IRA after age 59 1/2

Forum|Forum|1 year ago
August 31, 2024
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I am over 59 12. If I convert an IRA to a Roth IRA (this would be a new Roth IRA), can I withdraw the contribution (not earnings) before 5 years.

A specific example. I convert $100,000 from my IRA to a Roth and pay the income tax from the conversion. I understand that I cannot take any earnings out of the Roth for 5 years without penalty. Can I take any of the initial $100,000 conversion out before the 5 year waiting period.

I have seen some websites that say this is possible, others say it is not. I have had one tax advisor say it is possible and another say it is not.

Any help would be appreciated.

Best answer by NCPERSON1

Sorry I used the word contributions. Yes, this is a conversion.

@twb-53 you can ALWAYS distribute money from your Roth IRA. The real question whether there are tax implications

Since you are over 59.5, there is NEVER a 10% penalty.

The CONTRIBUTIONS and CONVERSIONS dollars can be distributed tax free.

The EARNINGS are subject to INCOME TAX if any Roth you own has not been open for 5 calendar years.

On distributions, the IRS assumes all the CONTRIBUTIONS are distributed first, all the CONVERSION dollars are distributed 2nd, and then and only then are the earning distributed.

NCPERSON1

@twb-53 since you are over 59.5, the answer is 'yes'. there is NEVER a 10% penalty on distributions from an IRA once you turn 59.5.

Your understanding of the earnings is correct. That Roth IRA needs to be open for 5 calendar years and after than, none of the earnings are taxable either. Understand, if you have multiple Roth accounts, it's just the oldest one that needs to be open for 5 calendar years.

and technically, you did a "conversion"; you didn't make a 'contribution' - IRS uses those words differently..:-)

twb-53Author

I understand that there is no penalty on distributing from an IRA after 59 1/2, but that was not quite the question.

To restate: The ROTH IRA is opened after 59 1/2. Can I immediately withdraw the contributions without penalty after opening. I have been told that I cannot even withdraw the contributions for 5 years. Your answer only confirmed the earning part.