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I'm considering converting my traditional IRA into my roth IRA. I'm concerned that there is a holding period in which I will not be able to withdraw from the roth IRA without penalty.


The BIDaWIZ Team's Answer:

If you convert a traditional IRA into a roth IRA, you must wait at least five years from the first day of the tax year in which you made the conversion before you can take a qualified distribution. This is noted in IRS Publication 590 and in the Internal Revenue Code Section 408A(d)(2)(B) In addition, the account holder needs to wait until they reach the age 59 1/2 before a qualified distribution of earnings can occur without taxes or penalties. Please note that only earnings on the converted assets may be subject to penalties and taxes, not the original contributions. Please also note that each conversion has its own five-year waiting period before a qualified distribution can occur.

The BIDaWIZ Team



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