About this episode
James explores the nuanced aspects of Roth IRAs, shedding light on intricacies that can confound even experienced investors. Through a listener question from Manfred, a retiree contemplating a $50,000 conversion from a 401k to a Roth account, James dissects the crucial five-year holding period and the order in which contributions, conversions, and earnings are treated during withdrawals. James also provides clarity on distribution rules, exceptions, and strategic considerations, offering a comprehensive guide to navigating the complexities of Roth IRAs for optimal retirement planning. Questions Answered: How does the timing of subsequent conversions impact the application of the five-year rule? In Roth IRA withdrawals, what is the specific order of operations, and what implications does that have? Timestamps: 0:00 Manfred’s question 1:39 Get the cheatsheet 2:37 Understanding source nuances 7:01 The five-year rule 8:37 IRS’s order of operations 11:59 Exceptions to the rule 13:49 Only a small impediment 16:14 Back to Manfred’s example Create Your Custom Strategy ⬇️ Get Started Here. Join the new Root Collective HERE!