IRA to Roth conversions

[epereira1059]

I am 64 years old and had opened a Roth IRA with eTrade several years ago (more than 5) and funded it while I was working. Now I am "retired" and just did an IRA to ROTH conversion last year to a new Roth account (with Fidelity). I assume I can withdraw earnings from the first eTrade Roth without any penalty as I am over 59 1/2 and have met the 5-year requirement. Does the second Roth account (Fidelity Roth - IRA conversion) also need a 5-year waiting period before I can withdraw earnings? I am thinking of converting another small amount from my IRA into the Fidelity Roth account (conversion account) - will I have to wait another 5 years to withdraw earnings from the second conversion as well?

[Bsch4477]

No, the five-year rule for Roth IRA conversions does not apply if you withdraw funds after age 59 1/2. The five-year rule applies to withdrawals from a traditional IRA or 401(k) that has been converted to a Roth IRA before age 59 1/2

[NCperson · Accepted solution]

@epereira1059 none of your distributions will ever be subject to tax.  Here is how it works: 

if the oldest Roth IRA account has been opened for five years AND you are over 59.5 years old, none of the distributions are subject to tax. 

it doesn't matter if you have multiple Roth accounts that were opened at various times.  As long as the oldest one has been opened for five calendar years (meaning opened prior to 1/1/20 for the 2024 tax year), you are "golden". 

New contributions don't have to wait five years either.  You can contribute today and withdraw tomorrow at no tax or penalty on the withdrawal. 

also, but it doesn't matter here, the way the IRS views distribution is that ALL contributions are distributed first, then all conversion dollars are distributed next and then and only then are earnings distributed.  

[epereira1059]

Thank you - much appreciated. 

[epereira1059]

Thank you also for the detailed explanation.