Roth 5-Year Rule(s)
retirementAlso known as: 5-year rule, Roth IRA five-year rule, Roth conversion 5-year rule
Updated · Written and reviewed by Konstantin Iakovlev
Detailed explanation
Rule 1 (earnings): clock starts January 1 of the tax year of your first Roth contribution to ANY Roth IRA. Once met (and over 59½), all Roth earnings are tax-and-penalty-free forever. Rule 2 (conversions): each conversion has its own 5-year clock. Withdraw converted principal before 5 years AND before 59½ → 10% penalty (no income tax, since you already paid it at conversion). After 5 years OR after 59½, principal is penalty-free. The "Roth conversion ladder" used by FIRE early retirees stacks conversions yearly to create rolling 5-year-old principal pools available penalty-free. Inherited Roth IRAs follow their own rules under SECURE Act.
Use these calculators to apply this concept
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