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Hi AJ,

Presuming you meant RMD, not WRD - no, an RMD cannot be converted to a Roth. Most brokers make you take the RMD out, or at least have a plan set up to take the RMD out monthly, before they allow you to do a Roth conversion.

When doing these conversions do you have to wait 5 years before you can touch any money that you convert? So if I did a conversion every year would I have to wait 5 years to touch each conversion?

Andy
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I believe we can withdraw some amount from our IRA's every year and convert to a Roth. Is this actually do-able? What are the mechanics?

Yes, although you don't generally withdraw and then convert - you generally move assets (either money or stock) directly into the Roth from the Traditional IRA, without taking control of the money yourself. That's important because if you take control of the money yourself, it's considered a rollover, and you are limited to one every 365 days. You want to do a trustee-to-trustee conversion.

The mechanics depend on your broker. I've done mine at Vanguard using their website. Not sure about others. If your Roth is at a different brokerage than your Traditional IRA, you can either set up a Roth at the same brokerage that your Traditional is at, or you can ask the Roth custodian to pull the assets from the Traditional brokerage.

Can any part of my WRD be used to fund a Roth?

Presuming you meant RMD, not WRD - no, an RMD cannot be converted to a Roth. Most brokers make you take the RMD out, or at least have a plan set up to take the RMD out monthly, before they allow you to do a Roth conversion.

AJ
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Hi AJ,

Presuming you meant RMD, not WRD - no, an RMD cannot be converted to a Roth. Most brokers make you take the RMD out, or at least have a plan set up to take the RMD out monthly, before they allow you to do a Roth conversion.

When doing these conversions do you have to wait 5 years before you can touch any money that you convert? So if I did a conversion every year would I have to wait 5 years to touch each conversion?

Andy
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When doing these conversions do you have to wait 5 years before you can touch any money that you convert? So if I did a conversion every year would I have to wait 5 years to touch each conversion?

If they are non-qualified distributions, then yes, you have to wait 5 years for each individual conversion. However, if you meet the requirements to take qualified distributions, you can take the money out immediately. Qualified distributions you to meet 2 different conditions: (1) You have had a Roth IRA account open for at least 5 tax years and (2) you are at least 59 1/2, permanently disabled, you are a beneficiary of an inherited IRA, or you meet one of the other exceptions like the first time homebuyer exception. So if you are old enough to take RMDs and your Roth account has been open for at least 5 tax years, you don't have to worry about timelines for individual contributions.

AJ
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Qualified distributions you to meet 2 different conditions: (1) You have had a Roth IRA account open for at least 5 tax years and (2) you are at least 59 1/2, permanently disabled, you are a beneficiary of an inherited IRA, or you meet one of the other exceptions like the first time homebuyer exception. So if you are old enough to take RMDs and your Roth account has been open for at least 5 tax years, you don't have to worry about timelines for individual contributions.

I tried searching on the IRS website for this answer, but couldn't find what I was after. Do you know if the condition is that you have had any Roth IRA open for at least 5 years, or the particular Roth into which you are putting the conversions?

I am asking because this is the year that we are starting to do IRA to Roth IRA conversions, but we are doing it with our FP, so the IRA is with him, and we are opening a Roth with him into which the conversion funds are going. But we already have Roth IRAs at another broker that I manage. We both meet the age condition already, so I was thinking that we could then take this money out of the Roth whenever we want, but your statement above has me wondering. It makes sense to me that we just need to have had a Roth open anywhere, and that the 5 year requirement does not apply per account, but I know that taxes don't always make sense.

Any idea? I'll still be doing the conversions over the next few years, but if there's something else that I need to be tracking, I'd rather know that upfront.
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Do you know if the condition is that you have had any Roth IRA open for at least 5 years, or the particular Roth into which you are putting the conversions?

It's any Roth IRA. Here's the specific wording from IRS Pub 590-B https://www.irs.gov/pub/irs-pdf/p590b.pdf

What Are Qualified Distributions?

A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.

1. It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and
2. The payment or distribution is:
a. Made on or after the date you reach age 59 1/2,
b. Made because you are disabled (defined earlier),
c. Made to a beneficiary or to your estate after your death, or
d. One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit).


"a Roth IRA" means any, not a specific account.

AJ
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Thanks. I figured it was that, but with tax law, you just never know.
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