Personal Investments • Roth IRA 5 year rule - What about additional earnings?

[Moved into a new thread from: Roth IRA 5 year rule, what if I move Roth 401 K to an existing Roth IRA --admin LadyGeek]

Check out this extremely handy & informative chart- it will answer all your questions. I am 99% sure you are over-thinking this.
https://www.bogleheads.org/wiki/Roth_IRA#Notes

Thanks for that link. That chart is helpful.

Your taxable conversion funds would have a 10% penalty, but would not be taxable, if withdrawn prior to satisfying the separate 5 year rule for that conversion, if you are not age 59.5.

Note that your contributions come out first due to IRS ordering rules for Roth IRAs. Only after all contributions are withdrawn do the other types of money get withdrawn- conversions are second- with converted pre-tax dollars taken first and then converted after-tax dollars are taken. Earnings are always distributed last.

Apologies to the OP but I have a slightly different situation. I'm 65 yo.

2018 Started making Roth contributions to 401k
2022 Made a $97k Roth conversion from my tIRA into a Roth IRA account created for that purpose.
2023 Rolled over $100k from the Roth 401k to my Roth IRA.
2024 Value of the Roth IRA account is now $232k

The $97k that was a Roth Conversion from the tIRA isn't available for withdrawal w/o a penalty until Jan 1 2026. However the Roth 401k contributions that were rolled over to the Roth IRA account are available to withdraw penalty free now. What about the additional $35k of earnings? Can those not be touched until 2026 or can they be withdrawn on a prorated basis?

Statistics: Posted by WeakOldGuy — Wed Jan 17, 2024 4:38 pm — Replies 6 — Views 105

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