Quote:
Originally Posted by Shish
Each Roth Conversion must be treated separately when considering the 5-year rule. The 5 years starts on January 1st in the year of conversion and ends in 5 years from that point. This is true, even if converting into an existing Roth IRA opened 10 years ago.
It is a good idea to open a separate Roth IRA for each conversion in order to easily track your investments and 5 years.
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There are lots of mixed messages here, so let me clarify - the deciding factor is if you are over or under 59 1/2.... the rules change. So both sides are correct, but it depends on what your age is. For conversions done before 59 1/2 there is the whole craziness of track each one etc.
But if you are over 59 1/2, you just have to have an account that is open for 5 years, then withdraw at your whim and there are NO taxes, period
I opened a roth with $100 when I was like 56, so when I start Roth conversions at 65 and roll over my Roth 401K about then, I have no worries about when the conversions were done or anything. To be honest, not sure what the concern would be about conversions - why would you do one if it was not to avoid an RMD later, which means your not going to pull the money anytime soon anyway?
Like I said the confusion is the age. I have done a lot of research on this, there is a lot of confusion, but that is the way it actually is supposed to work. I personally don't think the IRS is going to come after anyone if they are over 59 1/2 anyway.
Ed