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I stopped working September last year and plan to convert 20-30k into a Roth account this year from my 401k with little tax or penalty hit. 5 years from now that conversion will be available to withdraw penalty free.

For those planning on doing this, please be clear that only the dollar amount converted will be available penalty free until you are at least 59 1/2 (or meet some exception). (I'm sure whyohwhyoh is aware, but wanted to be sure that the larger audience is.)

The details on how the withdrawals are withdrawn tax and penalty free will be managed using Form 8606 (form: instructions: ) in your tax return each year, so be sure that you are filling those out each year you do a conversion. Also, be sure you keep copies of those forms for when you want to start doing withdrawals, as you will need figures from the prior year forms to fill out the current year forms.

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