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It is my understanding that all contributions to a Roth including Roth Conversions (on which taxes were paid on the conversion amount(s)) can be withdrawn at any time without penalty.

Only the earnings on the contributions are subject to the 5 year holding period and the 59 1/2 age requirement to avoid Federal and possibly State premature withdrawal penalties. Am I correct?


Contributions can be withdrawn at any time without tax or penalty.

Conversions can be withdrawn at any time without tax. If you are under 59 1/2 at the time of the withdrawal and the conversion is less than 5 years old the penalty applies.

Earnings withdrawn are subject to tax if it's not a "qualified" distribution. The penalty applies if you're under 59 1/2.

Note that if the penalty applies all the standard exceptions to it (education, medical, etc.) are avialable.

One of the more confusing things about Roths is that there are two different 5 year tests. One is the 5 year aging required before any Roth distribution is "qualified." Once it's been 5 tax years since your first Roth contribution (including conversions), you're covered for all your Roth monies, even the contribution you made yesterday.

The other is the 5 year aging required of a conversion to avoid the premature distribution penalty. Each conversion has its own 5 year period. This test becomes moot when you turn 59 1/2.

See Chapter 2 of Pub 590.

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