The Motley Fool Discussion Boards
Investing/Strategies / Retirement Investing
|Subject: Re: Investing after retirement||Date: 3/29/2006 8:51 PM|
|Author: intercst||Number: 50782 of 77092|
<<<Under 65 the IRS assesses a 10% penalty on TIRA distributions, but your conversion to a Roth is not considered a distribution so no penalty
You can also withdraw from a TIRA penalty free at any age using the "substantially equal periodic payments" (SEPP) rule.
OTOH, if you don't need the money, I'd say it's a good idea to convert it to a Roth up to the 25% tax rate.
Murray is correct about SEPP, but the OP's quoted statement about "under 65" is not correct. The age at which the 10% early withdrawal penalty is not longer applicable is 59 1/2.
That's not entirely true.
There's also a "minimum of five years" rule associated with SEPPs. So if you started taking SEPP withdrawals at age 58, you'd have to continue them to age 63 to avoid the 10% penalty.
|Copyright 1996-2015 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us|