Roth Conversion & 5 Year Rule

[SensibleandHourly]

Hello Community,

A client who plans to make a Roth Conversion move late in the year asked me if the new amount in his 5+ year-old Roth would fall under the 5-year rule considering that he is older than 59 1/2? Also, is there a difference between the conversion amount and then the associated interest? 

Or, since he is older than 59 1/2, the 5-year rule no longer applies, and the funds are simply available, regardless of contribution, conversion, or earnings? 

I can't seem to find clarification on the IRS site. 

If anyone knows where I can find that, I sure would appreciate it, 

Dawn 

[TaxGuyBill]

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@SensibleandHourly wrote:

make a Roth Conversion

 in his 5+ year-old Roth

Or, since he is older than 59 1/2, the 5-year rule no longer applies,

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The five year rule for conversions does not apply because he is over 59.5. 

The five year rule for having a Roth applies, but it seems like your client meets that rule.

https://www.irs.gov/publications/p590b#en_US_2023_publink100089543

[qbteachmt]

Try this type of article:

https://smartasset.com/retirement/roth-ira-5-year-rule

There are multiple 5-year rules with Roth IRA.

Having any Roth IRA account, needs to have existed 5 years, even if the one being used is not that old.

Any conversion starts its own 5-year clock.

There are ordering rules with Roth IRA distributions.

https://dev-rlc-public-site.netlify.app/resources/roth-ira-distribution-ordering-rules/

Contributions are always taken first; conversions (if any) are second in order by year of contribution, with converted pre-tax assets taken first and converted after-tax assets taken second. Earnings are considered distributed last.

[SensibleandHourly · Accepted solution]

Thank you, both, for these links. It is helpful just to have a fresh perspective and these articles get into the details about conversion. Merci Beaucoup!!!