I'm over 70.5 years without earned income, so it is impossible for me to contribute to my Roth IRA. I start RMDs next year and I know that Roth conversions do not qualify as RMDs.
My question involves an IRA to Roth conversion for this year (i.e. not an RMD). Since I've had my Roth for more than 5 years and I am past 59.5, I can withdraw money from my Roth without penalty. If I understand things correctly, I could convert dollars from my IRA to my Roth and then the next day withdraw that money tax free (I realize there will be taxes on the conversion from IRA to Roth).
Is this understanding correct?
As an example, say I have $10K in my Roth at present. I convert $5K from my IRA to my Roth on Monday. On Tuesday, I remove $14K from the Roth. This would be a tax-free withdrawal, correct?
Incidentally, I am not planning on doing this quick a withdrawal. I want to withdraw some IRA money this year (last year reporting taxes as MFJ), want that money readily available, but don't want to pay taxes on gains/interest that I might earn on that money. Putting it in my Roth seems the only way to do this. I just want to make sure I'm not limiting my ability to access the money should I need it soon (say, to buy a car). If there are any limitations, I can simply put the IRA withdrawal in a MM account and pay taxes on any interest/dividends it kicks off.
My question involves an IRA to Roth conversion for this year (i.e. not an RMD). Since I've had my Roth for more than 5 years and I am past 59.5, I can withdraw money from my Roth without penalty. If I understand things correctly, I could convert dollars from my IRA to my Roth and then the next day withdraw that money tax free (I realize there will be taxes on the conversion from IRA to Roth).
Is this understanding correct?
As an example, say I have $10K in my Roth at present. I convert $5K from my IRA to my Roth on Monday. On Tuesday, I remove $14K from the Roth. This would be a tax-free withdrawal, correct?
Incidentally, I am not planning on doing this quick a withdrawal. I want to withdraw some IRA money this year (last year reporting taxes as MFJ), want that money readily available, but don't want to pay taxes on gains/interest that I might earn on that money. Putting it in my Roth seems the only way to do this. I just want to make sure I'm not limiting my ability to access the money should I need it soon (say, to buy a car). If there are any limitations, I can simply put the IRA withdrawal in a MM account and pay taxes on any interest/dividends it kicks off.
Statistics: Posted by Raybo — Wed Oct 30, 2024 6:20 pm — Replies 2 — Views 315