- quote -

You need to re-investigate section 72. There is no
premature distribution penalty on IRA distributions after
age 59 1/2. Period.

--
Phil Marti
Clarksburg, MD

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Phil Marti wrote:

- quote -

I am not a tax person, but my investigation of this shows
that it must be left to which ever is later to avoid
penalty. I am past 59.5 but would have to wait 5 years on
each conversion that may decide to do now or in the future.

--
Mike

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- quote -

Neither. Unlike the apportioning of every distribution that
applies to traditional IRAs with undeducted contributions,
nonqualified distributions from Roth IRAs are ordered:
contributions, then conversions, then earnings.

- quote -

The conversion has to be left for 5 years or age 59.5,
whichever is sooner, to avoid penalty.

--
Phil Marti
Clarksburg, MD
"HW "Skip" Weldon"

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Bill wrote:
- quote -

The annual contributions were made with AFTER TAX money,
therefore they can be withdrawn AT ANY TIME with no tax or
penalty (regardless of your age). Any earnings, however,
will be subject to ordinary income tax and a 10% early
withdrawal penalty. No where close to the $400+ quoted
above.

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- quote -

If the account was partial conversion money, would it taint
the entire account, or merely pro-rata?

Whatever, assume that the conversion money has to remain 5
years. Or is it 5 years and 59.5?

-HW "Skip" Weldon
Columbia, SC

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- quote -

Since these were contributions, not conversions, they can be
withdrawn at any time without tax or penalty.

--
Phil Marti
Clarksburg, MD

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A: Because it reverses the flow of the dialogue.
Q: Why is top-posting frown on in newsgroups?

"Jim Beaver" <jumblejim[at]prodigy.spam> wrote:

- quote -

Why does it bother you to just let it sit there?
The $4K isn't going to make you any more income if
you drag it out of the Roth and put it into something else.

You can transfer the funds to something with a higher
possibility of return (and greater risk), if you don't like
your present investment.

In my opinion, your best choice is just to leave it sit.
When you reach the appropriate age, if you really don't like
it, you can withdraw it without penalty. Changing your mind
before you reach the appropriate age, you'll have to pay tax
and a penalty on all gains.

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Jim Beaver wrote:

- quote -

You must live it in there until your "about 5 years" is an
ACTUAL 5 years, then you can withdraw your contributions tax
free. As for the earnings, that may be subject to tax
(income and excise) if you're not old enough (or meet some
other exception to recognition).

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jumblejim[at]prodigy.spam (Jim=A0Beaver) wrote:

- quote -

Until the year in which you reach age 59 1/2, any
distribution will be considered "Early" -- and subject to a
penalty of 10% _additional_ tax. Note the "additional" ...
which goes on line 59, Form 1040, after normal taxes are
calculated.

There are a few exceptions offered (See Pub 590 for a
complete list) ... but they do _not include "a temporary
cash-flow situation." So, in all likelihood, you'd be
paying $400+ for your "Early" withdrawal.

Bill

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"Jim Beaver" <jumblejim[at]prodigy.spam> wrote:

- quote -

Sure, it's your money. The $4,000 will be tax and
penalty-free. The earnings will be subject to tax and the
10% premature distribution penalty.

I hate to bring a skunk to the garden party, but you also
owe the 6% excess contribution for every year that the
excess has been in the IRA.

Details are in IRS Publication 590.

--
Phil Marti
Clarksburg, MD

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I've got a Roth IRA which I've had for about five years.
The first two years I contributed $2000. However, the
second year, my income was high enough that I was not
allowed the full $2000 contribution and I paid a penalty.
Since then, my income has been too high to allow a
contribution, and so that $4,000 just sits there, growing by
pennies and not really serving toward my retirement (which
due to a pension plan and a substantial inheritance is well
taken care of).

Am I allowed to change my mind about having an IRA and
cancel it, pulling out the four grand? Or does it just have
to sit there doing not so much until I reach retirement age?
It does not look as though I will be able to make further
contributions with my current income. Despite my income,
though, I'm in a temporary cash-flow situation in which I
would like to grab that $4,000 if I could, since it's not
doing me much good where it is.

Must I leave it in the Roth? May I take it but have to pay
a penalty? (How much?) Or may I just take it and say,
sorry, changed my mind?

J.N. Beaver

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