Roth Five-Year Rule Calculator: the facts

1. A Roth IRA distribution is qualified, and entirely tax-free, only if two things are true: five taxable years have passed since January 1 of the first year any Roth IRA was funded, and the owner is 59½, disabled, deceased, or buying a first home (§ 408A(d)(2)). A contribution made for 2025 by April 2026 starts the clock on January 1, 2025.
2. That clock is one per person, not one per account: a Roth opened decades ago satisfies it for a Roth opened last year. It never restarts.
3. Each conversion has its own five-year clock for a different purpose: converted dollars withdrawn within five taxable years of the conversion, before 59½, carry the 10 percent additional tax as if they were taxable (§ 408A(d)(3)(F)). At 59½ that clock stops mattering; the income tax on the conversion was already paid.
4. Withdrawals come out in a fixed order: regular contributions first, then conversions oldest first (the taxable part of each before its nontaxable part), then earnings (§ 408A(d)(4)). Contributions are never taxed or penalized; earnings are the only layer that can be taxed.
5. So a nonqualified withdrawal is often costless: as long as it stays within contributions and seasoned conversions, nothing is owed. Only reaching the earnings layer before both conditions are met produces tax, and a penalty before 59½.
6. After 59½ with a young account, earnings withdrawn are taxable as ordinary income but not penalized; the fix is to wait for the clock, which runs from the first year any Roth was funded, including by conversion.

Educational only, not investment, tax, or legal advice. Results are hypothetical estimates that vary with each use and over time and are not guaranteed accurate or complete. Using this tool creates no client relationship with Considerate Capital, and the site that linked here is not affiliated with it. By using it you agree to the tool terms.