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Author: JAFO31 Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121585  
Subject: Roth IRA and 72T Date: 1/24/2001 9:50 PM
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Post 29584 on the Retire Early board is asserting the position in italics, which does not match my understanding of Roth IRA withdrawals (my understanding is more in line witht he prior poster):

[Prior poster] <<<<I looked into converting my IRAs into Roth, but from what I read ROTH IRAs aren't eligible for 72T withdrawals (i.e. you have to wait til age 59 1/2 to start withdrawing money penalty-free from a Roth).>>>>

"you can withdraw any rollover amounts 5 years after
the rollover date without any penalty. the tax must
be paid on the rollover amount in the year of the
rollover. let's say you rollover $30K per year for
the next five years. you pay tax each year on that
$30K. then, in each of the following five you can
withdraw $30K from your roth account(s) and owe
neither tax nor penalty. indeed, you can continue
rollovers during those years, as well, and even after
you turn 59 1/2.

once you are 59 1/2 you can start to tap
the EARNINGS from your roth accounts tax free and
penalty free, as well. however roth withdrawals are
first-in-first-out, so you must stop rollovers five
years before you want to tap the roth earnings, to
stay penalty free."


My understanding is that rollover amounts withdrawn from a Roth IRA before age 59 1/2 (barring disability or some toher qualifying event) are taxable and penalized. I further understood that it was only contributions that could be withdrawn without tax before age 59 1/2 (because tax was paid going in). IOW, rollovers are not treated teh same as new contributions. I also beleive that the other poster is confussed about the 5-year rule, but that is not the thrust of my question.

Am I mistaken in my understanding????

Regards, JAFO
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