@jonic wrote:
So just to be clear, it doesn't matter that I am already older than 60? If I spread out the conversion over several years instead of converting it all in one year, then each year I convert must wait 5 years, even though I am putting it into the same Roth IRA account? So for example, If I contribute 8/2022, I can take that portion out 1/1/2027, then convert more funds on 8/2023, I can take that portion out 1/1/2028, and so on? Not that I plan to, but I just like to know what the rules are.
Everyone is subject to the 5 year rule that if you take out earnings before your Roth account is 5 years old, the earnings are taxable. (The clock actually starts from opening your first Roth account, so if you had a Roth IRA more than 5 years ago, that clock is satisfied even if you open new accounts for these conversions.). If you have never had a Roth account before, you must satisfy that "master" 5 year rule, which is to say, if you open your first Roth IRA in 2022, you will pay regular income tax on any earnings withdrawn before January 1, 2027.
There is a different 5 year rule that says that each conversion carries a separate 5 year clock, and if you withdraw that conversion before 5 years, you will pay a 10% penalty for early withdrawal. Because the 10% penalty for early withdrawal never applies over age 59-1/2, the separate 5 year clock for each conversion can be ignored after age 59-1/2.
See more here,
https://ttlc.intuit.com/community/retirement/discussion/re-how-to-take-roth-earnings-out-after-age-5...
