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URL:  http://boards.fool.com/payingfool-writes-ltltltunder-65-the-irs-23904317.aspx

Subject:  Re: Investing after retirement Date:  3/29/2006  8:51 PM
Author:  intercst Number:  50782 of 76421

PayingFool writes,

<<<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.

See: http://www.retireearlyhomepage.com/wdraw59.html

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 >>>


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.

intercst

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