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Roth Conversion 5 Year Rule--on an exiting conversion.

Forum|Forum|2 years ago
December 7, 2023
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I did a Roth Conversion in 2014 and have not touched it. I want to do several more over the next 4 years to reduce RMD liability. I am over 69 years old. Does the 5 year rule apply to this new conversion monies? Do I have to open a new Roth account to segregate these new conversions if the 5 year rule applies?? IT would be simpler for me to do a conversion in 2023 or 2024 or later and just deposit the monies into my old Roth-- can I do this and not be concerned about the 5 year rule?? thanks

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Best answer by dmertz

As Opus 17 says, after age 59½ the 5-year conversion rule no longer applies.

At Age 69 and having made a Roth IRA contribution in 2014, your Roth IRAs are qualified; you have met the age rule and the separate 5-year qualification rule. All distributions are free of any tax or penalty and are not reported on Form 8606 Part III.

For tax purposes, all of your Roth IRAs are treated as if they were a single account.

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Opus 17

Employee

Since you are over age 59-1/2, you can ignore the 5 year rule for conversions. That rule states that a 10% penalty for early withdrawal must be paid for conversion amounts that are withdrawn in less than 5 years. But the 10% penalty for early withdrawal is never applied after age 59-1/2, so the rule no longer applies to you.

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frankloc76Author

Okay-- so there is no 5 year clock on any money I convert into the old Roth going forward. Is that Correct OPUS?

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Opus 17

Employee

@frankloc76 wrote:

Okay-- so there is no 5 year clock on any money I convert into the old Roth going forward. Is that Correct OPUS?

Correct. The basic 5 year clock for all Roth IRAs still applies no matter your age, but you seem to have met that many years ago. You don't have to keep track of the 5 year conversion clock after age 59-1/2.

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dmertzAnswer

Employee

As Opus 17 says, after age 59½ the 5-year conversion rule no longer applies.

At Age 69 and having made a Roth IRA contribution in 2014, your Roth IRAs are qualified; you have met the age rule and the separate 5-year qualification rule. All distributions are free of any tax or penalty and are not reported on Form 8606 Part III.

For tax purposes, all of your Roth IRAs are treated as if they were a single account.