Each Roth conversion starts a new five-year period, separate from the original IRA's timeline. Inherited Roth IRAs require full withdrawal within 5 or 10 years, based on the owner's death year.

But to avoid the 10% penalty, you generally must satisfy the five-year Roth IRA conversion rule. “For Roth conversions, the five-year-holding period is set for each individual conversion amount ...

Conversions and beneficiaries: If you convert a traditional IRA or 401(k) to a Roth IRA, withdrawals are subject to a five-year waiting period to avoid a penalty.

If you later convert other traditional IRA assets to a Roth IRA in 2024, the five-year period for those assets began on Jan. 1, 2024. All of this can be confusing.

For example, a Roth IRA conversion made at any time in 2024 is deemed as having been made as of January 1, 2024. For that specific 2024 conversion, the account owner would be able to take a ...

If you convert another $20,000 to a Roth IRA in 2024, you'll need to fulfill another five-year rule and wait until 2029 to make qualified distributions. Sponsored Gold IRAs 1 ...

So if you convert traditional IRA funds to a Roth IRA in September 2024, your five-year clock begins on Jan. 1, 2024, and you could withdraw the funds penalty-free on Jan. 1, 2029.

The five-year rule for Roth conversions exists to prevent people from using conversions to completely avoid the 10% early withdrawal penalty on traditional IRA assets by simply first converting ...

For example, if you do a Roth conversion in May 2024, your five-year clock would have started Jan. 1, 2024. As a result, you need to be mindful of your conversion history when taking distributions.

Also note that Roth IRA conversions have their own five-year clock, but that rule determines whether the conversion principal will avoid tax penalties. Roth IRA income and contribution limits.

If you fund a Roth IRA in April 2024 for the calendar year of 2023, the five-year rule starts as of Jan. 1, 2023. You could begin withdrawing earnings from the account on or after Jan. 1, 2028.

The Roth IRA five-year rule will not allow you to withdraw tax-free earnings from your account until five years after your first contribution unless ... Conversion of a Traditional IRA to a Roth IRA.