Craig Wear, CFP, explains the 5-year rule for Roth conversions: if you're 59½, you can withdraw converted amounts immediately but must wait five years to touch earnings without taxes. He walks through converting $100,000 per year over five years to show which money you can access when.
If you're already 59 and a half years old when you do the conversion, you do have to wait five years to access the earnings off of all those conversions, but you have immediate access to the converted amounts. So if you convert $100,000 this year and you do that each of the next five years, and you're 59 and a half years old when you do it, you have all that half a million dollars all through that time frame to be able to get access to. The only thing you can't do is take out more than that 500,000, because that would be then earnings. Then you'd have to pay tax on those earnings.
