dmertz
Level 15

Retirement tax questions

Some misinformation in the original question:

 

It's a governmental 457(b) plan, not a 479b.

 

As Critter-3 said, there is no requirement that if you convert to a Roth IRA that you convert the entire amount.

 

Amounts converted to a Roth IRA do not affect your eligibility to contribute to an IRA.  For the purpose of a Roth IRA conversion, one of the modifications to AGI is to subtract the taxable amount of any amount converted to a Roth IRA.  There is no MAGI limit to contribute to a traditional IRA, but the Roth conversion will raise your MAGI for the purpose of being able to deduct a traditional IRA contribution if you are covered by a workplace retirement plan (which you are for 2023).

 

If you have no basis in nondeductible traditional IRA contributions, there is no difference between converting some amount directly from one of the employer plans to a Roth IRA and  first rolling over those funds to a traditional IRA and then immediately converting those funds to Roth.  With no nondeductible traditional IRA contributions, rolling over everything to a traditional IRA first and then converting some amount to Roth is probably a bit easier to manage.

 

There is no 5-year conversion rule for those over age 59½ because that rule is only for determining if upon making a distribution from a Roth IRA there needs to be a recapture of an early-distribution penalty.

 

Because your first Roth IRA contribution was for 2018 and you are over age 59½, as of January 1, 2023 your Roth IRAs are qualified and any amount you take our of your Roth IRAs is free of any tax or penalty.