@jefals wrote:
Am I interpreting correctly that, since I made my first Roth conversion at age 75 (well past 59 1/2), that I can take any (or all) of the money out of that Roth at any time (even the very next day after I did the conversion, if I wanted to), with no penalty?
Mostly. However, if you withdraw earnings in less than 5 years, it will not be "qualified" and you will pay regular income tax on the earnings, even though you don't pay income tax on the converted principal. And that's where the ordering rules come into play.
Early and qualified are two different things, even though they are very similar and it's easy to get confused.
Any withdrawal you make before 1/1/2026 will be both early and non-qualified. The "price" for making a non-qualified withdrawal is paying regular income tax on the earnings but not the principal. There is no penalty for you for making an early withdrawal because you are over 59-1/2. Any withdrawal you make after 1/1/2026 will be qualified, so withdrawals of earnings will be tax-free. And even if your withdrawals are considered "early" due to the separate clock that runs for each conversion, there is no penalty at your age.
Basically, this relates to the difference between an IRA and a Roth IRA. Suppose I'm 50, and I want to withdraw from my regular IRA. I pay income tax plus a penalty. If there was not a separate 5 year clock on each conversion, then I could convert my IRA to a Roth, pay the income tax, then withdraw from the Roth tax-free and save 10%. That's why the 10% penalty is applied to conversions less than 5 years old, and it's also why that penalty is not applied if you are over 59-1/2, because you would not pay a penalty if you simply withdrew the money from the regular IRA instead.
