The Five Year Rule for Roth IRAs

In order to reduce the likelihood that anyone would renege on their decision to save for retirement in a Roth IRA, the IRS requires that Roth accounts exist for at least 5 years before any earnings can be withdrawn from the account. And they also have a five-year clock for conversions. And there’s technically another one for Roth 401(k)s. And another one for inherited IRAs. And the rules are a little different for each one. Simply put, it’s not very simple. In this video, Curt will try to untangle the confusion surrounding the five-year rule so you can avoid penalties on your Roth withdrawals. In this Video: 0:17 – About Roth IRAs 0:39 – Traditional IRAs 1:00 – The Five-Year Rule Explained 1:45 – Five-Year Rule Situations 2:15 – The Five-Year Rule for Normal Contributions & Earnings 4:36 – The Five-Year Rule for Conversions 7:21 – The Five-Year Rule for Inherited IRAs 10:02 – The Five-Year Rule for Roth 401(k)s 11:35 - Wrap Up Here’s a link to the blog post that accompanies this video: https://martinmoney.com/roth-iras-and... And here’s a link to our post about the Roth Conversion Ladder: https://martinmoney.com/early-withdra... Other Related Videos: Who Can Contribute to a Roth IRA?    • Who Can Contribute to a Roth IRA?   Should I Report My Roth Contributions to the IRS?    • Why You Should Report Roth Contributi...   How Much Should I Contribute to a Roth IRA?    • How Much Should I Contribute to a Rot...   Roth IRA or 401(k)? Which One is Better for Me?    • Roth IRA or 401(k)? Which One is Bett...   7 Reasons It’s a Good Idea to Have a Roth IRA -    • 7 Reasons It's a Good Idea to Have a ...   How Does My Money Grow in a Roth IRA?    • How Does My Money Grow In A Roth IRA?   How Can I Be Financially Independent by 30? -    • How Can I Be Financially Independent ...   How Long Will it Take Me to Be a Millionaire if I Save $100 Per Month? -    • How Long Will It Take To Become A Mil...   Why is Compounding Interest So Important? -    • Why Is Compounding Interest So Import...   How Much is a Dollar Worth Years from Now? -    • How Much Is A Dollar Worth Years From...   Other Related Blog Posts from MartinMoney.com: Five Reasons Roth IRAs Will Never Be Taxed - https://martinmoney.com/5-reasons-rot... Should I Have Both a Roth IRA and a 401(k)? https://martinmoney.com/should-i-have... Do I Have to Report My Roth IRA on My Tax Return? https://martinmoney.com/report-roth-i... At What Age Does a Roth IRA Not Make Sense? https://martinmoney.com/at-what-age-d... The Backdoor Roth IRA - https://martinmoney.com/the-backdoor-... Thanks for watching! Let us know if there are any other topics you want us to cover in the comments below. Don’t ever put any of your personal information in the comments! This makes you an easy target for scammers, some of whom may attempt to pretend that they are me. Disclaimer: This video is for information and entertainment only. None of the contents should be considered legal, accounting, or other professional advice. You should reach out to a qualified professional before making your own financial decisions.