How to Withdraw Converted Funds From a Roth IRA After Age 60

By: D. Laverne O'Neal

Count the years to discover whether your conversion withdrawal will be taxed.

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Qualified distributions from a Roth IRA -- that is, distributions that are free of tax or penalty -- must meet a two-pronged test. Reaching age 59 1/2 satisfies one-half of the test. The other half consists of satisfying the five-year holding period. Each time you convert a traditional IRA or other pretax qualified retirement plan to a Roth, you must wait five years before you can withdraw it without tax consequences. Consequently, even after age 60, if the account has been open for less than five years, a conversion withdrawal is subject to a penalty.

Step 1

Check the calendar. You will meet the five-year test on Jan. 1 of the fifth year after you make the conversion. So if you converted traditional IRA funds to a Roth in August of 2010, you can withdraw them free of tax on Jan. 1, 2015. If you do not pass the five-year test, the withdrawal will be subject to a 10 percent penalty.

Step 2

Tell your Roth trustee you want to make a withdrawal of the conversion amount. If you created a separate account for the conversion, you can simply liquidate that account. This might require paperwork and a fee. Otherwise, extract the funds from those with which they are commingled.

Step 3

Report the withdrawal on Internal Revenue Service Form 1040 at tax-filing time. If you have satisfied the five-year rule, you need only enter the amount on line 15a. If you have not, enter the amount of the conversion distribution on lines 15a and 15b.


About the Author

D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.

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