The Roth IRA is often marketed as simple and straightforward, but once you get into what are known as the “five-year rules,” things can get confusing fast. Today I break down six must-know facts about the Roth IRA five-year rule and explain why misunderstanding it can lead to unnecessary taxes or penalties.
I’ll take you through the differences between contributions, conversions, and earnings, how multiple five-year clocks can apply at the same time, and why ordering rules matter more than most people realize. This is a slightly more technical conversation, but it’s also one of the most important if you plan to use Roth money strategically before or during retirement.
The goal isn’t to memorize rules, but to understand how they fit together so you can avoid mistakes that eat away at your tax-free benefits. If you’re relying on a Roth IRA as part of your long-term plan, this episode will help you use it the way it was intended.
Important Information:
You should always seek counsel of the appropriate advisor prior to making any investment decision.
Christopher Panagiotu is a registered representative with, and securities and advisory services offered through LPL Financial, a registered investment advisor and member FINRA/SIPC.
The people and companies mentioned in this presentation are not affiliated with or endorsed by LPL Financial or CAPitalize Your Finances. LPL ART-634876 (11/24)