Quote:
Originally Posted by Packer Fan
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
|
Thanks for your analysis of the difference in ages explanations. . seems that this piece of information is where the differences lie, and where several posters may assume that the rule they were told was based upon their current age or situation. .
since we are over 65, seems the 5 year rule would apply.
So the issue is when to take the income. . and what are you avoiding. . as you are paying taxes now versus in the future.
So by taking 401K now, and not taking social security for a year or two, one is increasing social security basis, and reducing RMD in the future, assuming that you have enough income to support the expenses, without getting hit with excess taxes while taking social security.