dmertz
Level 15

Retirement tax questions

Nope.  Once you reach age 59½, distributions are no longer subject to an early-distribution penalty, the only thing to which the 5-year holding period for conversions applies (unless you are still under age 59½, in which case completing the 5-year holding period for a particular conversion also makes the amount converted be equivalent to a regular Roth IRA contribution).

 

The different 5-year holding period for determining qualified distributions starts January 1 of the year for which you first make a regular Roth IRA contribution or in which you deposit funds as a Roth conversion (or as a roll over from a qualified retirement plan).  Qualified distributions are always free of tax and penalty.  Because you have met the requirements for your distributions from your Roth IRAs to be qualified distributions, any distribution you now receive from any of your Roth IRAs is tax and penalty free.

 

Also, creating separate Roth IRAs for various contributions and conversions doesn't change anything.  For these purposes, the tax code treats all of your Roth IRAs in aggregate as if they were a single Roth IRA.