Roth IRA Conversion Withdrawal Question

I have a question that seems relatively straightforward but I can’t seem to find an answer to it. Assuming you’ve met the 5 year rule, Roth Contributions can be withdrawn anytime penalty free but I can’t seem to figure out how that works for Conversions.

For example, say I contribute $1,000 to a Traditional IRA, it makes $500 in interest, and then I convert that to a Roth IRA and pay the taxes with separate funds. Now I have $1,500 in the Roth IRA account, what portion of that could I theoretically withdraw penalty free?

$0 - Because conversions don’t count as contributions?
$1,000 - Because that was the contribution amount in the original account before the conversion?
$1,500 - Because conversions count as contributions regardless of the original source?

Any advice is appreciated.

Hi @nmsueagle,


Roth conversions are considered contributions. They do not affect your normal contribution limits.

Each conversion is controlled by a 5 year clock, similar to the one created when initially opening the Roth IRA.

If you are 59.5 or older, the “New Roth IRA” clock would still apply while the “Roth Conversion” clock does not apply over 59.5.

The order of withdrawal for a Roth IRA is:

  1. Normal Contributions.
  2. Taxable Conversions.
  3. Non-taxable Conversions.
  4. Earnings.

Does that help you?

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Yes, thanks, that helps. I knew about the separate 5 year clock for each Roth conversion but had forgotten. These conversions are well in the past so that’s not an issue, I was just trying to understand if I need to go back and figure out the portion of contributions to earnings in the previous account before the Conversion. It sounds like I do not have to, I can just consider it all contribution at the time of the conversion and there would only be potential penalties on any interest earned since then.

Thanks for the help!

Not exactly. You still have to follow the ordering rules for distributions that are detailed in IRS Pub 590-B ( Those rules require you to take out contributions first, and then, beginng with the oldest year, take out coversions by year. You will need to document this all on Form 8606, which is also required to be filed each year you do a conversion. It will be very useful to you to get the last Form 8606 you filed. If you have not filed a Form 8606, you need to file one that documents the connversions prior to taking any early distributions.