Mastering The Two 5-Year Rules Of Roth IRA Investing

Roth IRA 5 Year Rules Explained

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[stevec]

Heard various explanations on this subject on utube. I believe yours are correct. Thanks for the simple and clear explanations. 👍

[souledout]

This was very beneficial. Thank you for the clear and concise explanation.

[jolenewellman]

Thank you for your time and sharing your hard earnd knowledge with us!

[milliehummel]

Thank you Fast Lane very informative and I’m glad I watch your video tutorial. Thank you somuch

[asrivenki]

My understanding. Please correct if I am wrong.
Above 59 1/2 => No penalty (even if held for < 5 years).
Above 5 year holding of IRA yearly fund => No penalty (even if you are <59)

Tax exemption is only for 59 1/2 year old and who held more than 5 years.

[stevecothren]

Newer Subscriber here. I have watched several of your videos. I appreciate the content and delivery. I have a question for you. I have a Roth IRA that is over 12 years old at a broker so first 5 year clock is met, I turned 60 a few months ago so second 5 year clock met. I am planning on moving the Roth IRA to a different broker in kind due to expense fees. Does this in any way reset or start another 5 year clock. If so would it be better to leave a minimal amount in the original Roth IRA. Thanks for your help and keep the videos coming. Steve

[bmp]

When I inherited a Roth IRA I had to transfer the funds into a custodian beneficiary Roth IRA account, but its not clear if the beneficiary's account or the original owner's account needs to have existed for 5 years for earnings to be tax free. Since the original Roth was only with the current brokerage for 3 years before my mother passed they issued a T code, but I know for certain the original Roth was over 5 years old with other brokerages included.

Does the original owner or the beneficiary need to have held ownership of the Roth IRA funds for over 5 years for the earnings to be tax free?
If the brokerage used a 1099R T code instead of Q are the earnings still tax free?

[frankmaggio]

I am 58, I have never put into a roth ira, My eyes were recently just opened to all this- is it too late for me to do it now? Can I start with a thousand dollars ?where Would that somewhat get me, and in how long?
Estimated of course -or am I too late? Did I miss the boat?

[TravelingTheWorld]

Let's say that I turn 59 1/2 and My Roth IRA been opened for five years. I than rollover my Roth 401k to my Roth IRA. Would earnings from the Roth 401k be available immediately without any tax implications? Thanks

[jdgolf]

So if I first contribute to a roth on Dec 31, the clock will have started on Jan 1 of that year?

[markmiddaugh]

Iv'e heard that if one is doing a ladder conversion from a traditional IRA to a new Roth IRA (i.e., 40K per year for 10 years), each conversion resets the clock (the 5 years starts over with each conversion). Another source said each conversion has it's own individual 5 year clock). This is for folks over 59.5. I didn't hear you mention either of these situations. Which is true?

[lannyford]

best explained that 5 yrs rule does not apply for converted Roth if you are 59 1/2 years old (but it still apply to the earning part) regardless how long this Roth account you have had opened.

[als.]

Can you confirm the information in this video only applies to roth IRAs.

My understanding is for a backdoor roth after tax 401K (after tax contribution with automatic Roth conversion) distributions will part contributions and part earnings.

Distributions from a Roth 401(k) account will always be part contributions and part earnings determined pro-rata. For example, if your Roth 401(k) account is 70% contributions and 30% earnings, your distribution will be considered 70% contributions (always tax free) and 30% earnings (subject to tax unless a qualified distribution).

[mattmiller]

Does the 5 year rule apply to 401k money from my former employer, that was rolled into a Roth IRA? I have had the 401k for 16 years and rolled it into my Roth IRA which I have had for 25 years?

[CCB]

So fund a Roth IRA at 53 no matter what. Just to be on the safe side.

[mikejamerson]

I would like clarity/ confirmation… because the chart does not address my scenario. (First- No Roth Contributions.)
Over the 59 1/2 years old, a Conversion is done. As I am over the 59 1/2 years old, I can take out, without penalty (5- year rule does not apply?)
But, any Earnings from the Contributions need to stay put, for 5- years… not to have the penalty. Is this statement correct?

[davidcelliott]

Does a Roth 401k start the forever clock?

[derekcho]

what you fail to mention is the POP (period of performance) On The Profit. . Buy $1000 stocks at age 62. It doubles to $2000 and I sell it then at age 65. Is the five year clock starting at 62 on profits? or more likely 65 when you sold and profited. So tax free at 70. What is the answer please?

[yippie]

Question. What if I moved a 10 year old Roth IRA to another financial institution and also changed mutual Funds in it? Does the 5 year rule start from zero then? Thank you.

[patriciab]

Are you telling that if I opened my Roth IRA when I was 30 I can withdraw my contributions and earnings at 35 tax and penalty free!😊