Craig Wear, CFP®Craig Wear, CFP® | Expert in Roth Conversions & Tax-Efficient Retirement Strategies for IRA Millionaires

The 5 Year Rule Explained

7 Oct 2024 · 0 min

Watch on YouTube

0:25

Craig Wear, CFP, breaks down the two requirements for tax-free Roth IRA withdrawals: the account must be open five years and you must be 59½ or qualify for an exception like disability or first-time home purchase. A 2020 contribution starts the clock; the five-year period ends January 1, 2025.

Questions this video answers

(1) The Roth IRA must be open for five years, and (2) the account holder must be at least 59½ years old or meet another qualifying exception (disability, first-time home purchase, etc.).

January 1, 2025.

The requirement for you to be able to get the tax free withdrawals is that you have to meet two conditions. The Roth IRA must be open for five years and you must be at least 59 and a half years old or meet some other conditions which are disability or first time home purchase or that kind of thing. So for example, if you contribute money to a Roth in 2020 during the year the five year period ends January 1st of 2025.