Comments on: 5 Year Rule for Roth IRA Qualified Distributions and Withdrawals

By: Roth Conversion: Do You Have the Headroom? | The Incidental Economist

Roth Conversion: Do You Have the Headroom? | The Incidental Economist — Mon, 07 Dec 2009 13:31:09 +0000

[...] an early distribution of earnings you should do some more reading about the five year rule. See 5 Year Rule for Roth IRA Qualified Distributions at Good Financial Cents. AKPC_IDS += [...]

By: This Week from Personal Finance Blogs | Personal Investment Management and Financial Planning Blog Directory

Fri, 14 Aug 2009 04:59:10 +0000

[...] Rose presents 5 Year Rule for Roth IRA Qualified Distributions posted at Jeff Rose, saying, “How to get your money out of a Roth IRA tax and penalty free [...]

By: Carnival of Financial Planning – Edition #100 – August 1, 2009 | Cash Money Life

Tue, 04 Aug 2009 15:39:16 +0000

[...] Rose presents 5 Year Rule for Roth IRA Qualified Distributions posted at Good Financial Cents, saying, “How to get your money out of a Roth IRA tax and [...]

By: Britt (Your Roth IRA)

Britt (Your Roth IRA) — Mon, 03 Aug 2009 01:57:12 +0000

@Jeff – I agree with Jim, another excellent Roth commentary! You cover a complicated topic in easy to understand language. And most importantly, you cover a subject most Roth IRA participants don’t even know about…

While most people are aware of the 5 year rule, it isn’t common knowledge that there’s a difference between the tax year and the actual year in which you make a contribution. Obviously, that’s an important distinction.

Also, just to clarify, you quote IRS publication 590 in relation to what constitutes a qualified distribution. According to that quote, it’s qualified if the payment or distribution is:

“Made because you are disabled.”

It’s important that people understand the IRS definition of what constitutes “disabled.” That definition is also covered in IRS publication 590. So if someone reading this is on disability, they shouldn’t make the assumption that just because they qualify for disability payments or meet other government definitions of “disabled,” that they also meet the definition in IRS publication 590.

By: nil2million.com

nil2million.com — Wed, 29 Jul 2009 14:24:41 +0000

Carnival of Everything About Personal Finance – 7th Edition…

Welcome to the 7th Edition of Everything About Personal Finance! We’ve managed to collate a lot of articles from the contributing authors. I’m sure there’s at least one interesting article for everyone.
I’ve read one interesting article …

By: Money Hacks Carnival #75 – Get a Job Edition! | My Life ROI, Getting the Best Return On Life

Wed, 29 Jul 2009 10:49:48 +0000

[...] Rose presents 5 Year Rule for Roth IRA Qualified Distributions posted at Jeff [...]

By: Airstream Update: Did We Create a Monster?

Airstream Update: Did We Create a Monster? — Sat, 25 Jul 2009 10:46:09 +0000

[...] 5 Year Rule for Roth IRA Qualified Distributions by Jeff Rose at GoodFinancialCents [...]

By: Jim Blankenship, CFP®, EA

Jim Blankenship, CFP®, EA — Tue, 21 Jul 2009 13:29:03 +0000

Great explanation, Jeff -
One clarification in your Example #3: in order for the 5-year clock to begin on 1/1/2005, the contribution on 4/10/2006 in your example must be attributed to tax year 2005… if for some reason you are ineligible to make a 2005 contribution (no earned income or MAGI above $100k, for example), then the 4/10/2006 contribution would be attributed to tax year 2006 and the five-year clock would begin on 1/1/2006.

Keep up the great work!

jb
Jim Blankenship, CFP®, EA´s last blog ..Linksharing 7/19/2009

By: JoeTaxpayer

JoeTaxpayer — Tue, 21 Jul 2009 03:50:52 +0000

Another great IRA article.
Your example one is worth a small comment – given the ability to withdraw that money with no penalty, someone who is in a tight situation, unable to fund both an emergency account as well as the Roth, should consider putting those emergency funds “in” a Roth. If they do run into some financial issues, the money is there for withdrawal (to be clear, this is CD money, not invested in stocks) and if not, they didn’t miss the chance to start funding their retirement account.
This also makes the emergency fund feel a bit less accessible, it shouldn’t be raided for anything should of a true emergency.
JoeTaxpayer´s last blog ..Frugal Friday Week 9

By: Craig

Craig — Mon, 20 Jul 2009 17:02:52 +0000

Being I am in my first year of my Roth IRA am working towards maxing it out, this is nice to know. I enjoy learning more about the Roth IRA and how it can contribute to my future.
Craig´s last blog ..Quit blaming the economy and start protecting yourself already