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JBW writes:

<<This is very confusing. But when you withdraw money from a Roth there are a couple fazes.

1) The first $ out are your contributions. These may be withdrawn at any time. There is no waiting period.>>

That's correct.

<<2) Once your contributions have been exhausted, you start withdrawing monies from an IRA conversion. These monies can only be withdrawn after your account has been open for five years, or you will have to pay a penalty. After the five years you can withdraw the money at no penalty.>>

That is incorrect. The conversion money itself must be in the account for five tax-years, and the withdrawal ordering starts from the oldest deposit to the youngest.

<<3) The last batch is your earnings. Which can be withdrawn only for the specific purposes and after the five year period.>>

To further clarify, earnings may be taken tax and penalty-free after attaining age 59 1/2 and after the account has been open for five tax-years. To escape taxes and penalty on earlier withdrawals, the account must be open for five tax-years and meet one of the Roth qualified exceptions.

<<The clock starts when the Roth account is created.>>

For earnings, yes. For conversion contributions, no.

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