Contributing to a Roth IRA — or converting funds from a traditional IRA to a Roth — can help you build a potential source of tax-free
The first five-year rule
Because money contributed to a Roth IRA is made with aftertax dollars you can
The five- year holding period for earnings begins on January 1 of the tax ycar·for which you made your first contribution (regular or rollover) to any Roth lRA you own. For example, if’ you made your first Roth IRA contribution in March 2015 and designated it as a 2014 contribution. your five–year holding period began on January 1, 2014, and will end on December 31, 2018. You have only one five-year holding period for detennining whether distributions from any Roth IRA you own are qualified tax-free distributions. Inherited Roth IRAs are subject to differcnt rules.
When you convert assets in a traditional IRA or other qualified plans to a Roth IRA, the amount converted (except for any
The five-year rules on Roth IRAs are complex, but may offer opportunities for qualified distributions before five full years have passed. Be sure to consult your tax professional before takina any specific action that might have tax consequences
Joseph P. Fox, CLU, ChFC, CLTC is a Senior Partner at North Star Resource Group, 2701 University Ave SE, Minneapolis, MN 55414. Phone number (612) 617-6061. Over the last 20+ years he has gained a reputation for providing solid guidance to individuals, business clients and associates on estate, retirement, and financial preparedness issues. Joe is a registered representative and investment advisor representative with CRI Securities, LLC and Securian Financial Services, Inc., members FINRA/SIPC. CRI Securities, LLC is affiliated with Securian Financial Services, Inc. and North Star Resource Group. North Star Resource Group is not affiliated with Securian Financial Services, Inc. but is independently owned and operated. 1124178/ DOFU 2-2015. ences