Two clocks, three layers, one withdrawal.

The facts, in one place.

Six quotable sentences on the two five-year clocks.

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 Each conversion has its own five-year clock for a different purpose: converted dollars withdrawn within five taxable years of the conversion, before 59½, carry the 10 percent additional tax as if they were taxable (§ 408A(d)(3)(F)).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 After 59½ with a young account, earnings withdrawn are taxable as ordinary income but not penalized; the fix is to wait for the clock, which runs from the first year any Roth was funded, including by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.

What a withdrawal costs, by layer.

The four cases for each of the three layers.

How the clocks work.

There are two five-year rules, and most explanations blur them. The first belongs to the person: a Roth IRA distribution is qualified, and therefore entirely tax-free, only after five taxable years counted from January 1 of the first year any Roth IRA of theirs was funded, and only if they are also 59½ (or disabled, or deceased, or buying a first home). One clock, started once, never restarted, satisfied for every Roth IRA they will ever own.

The second belongs to each conversion: converted dollars taken out within five taxable years of the conversion, before 59½, carry the 10 percent additional tax as though they were taxable income, because otherwise a conversion would be a way around the early-withdrawal rule. That clock stops mattering at 59½. What ties the two together is the ordering rule: a withdrawal comes from contributions first, then conversions oldest first, then earnings. Contributions are never taxed or penalized, so a withdrawal that stays inside them costs nothing however young the account.

Methodology.

1. Inputs. The first year any Roth IRA was funded, the owner's age at the withdrawal, the account's contributions, up to two conversions with their years, its earnings, and the withdrawal.
2. The account's clock. Satisfied from January 1 of the fifth year after the first year funded (§ 408A(d)(2)(B)); with age 59½ (§ 408A(d)(2)(A)) it makes the distribution qualified.
3. Each conversion's clock. Five taxable years from the year of the conversion (§ 408A(d)(3)(F)); before that, and under 59½, the converted amount withdrawn bears the 10 percent tax of § 72(t).
4. The ordering. Contributions, then conversions first-in first-out, then earnings (§ 408A(d)(4)). Earnings are taxable unless qualified, and penalized as well under 59½.
5. Validation. A withdrawal under 59½ that reaches earnings through a young conversion; a qualified withdrawal after 59½; a young account after 59½ (taxable earnings, no penalty); and the year arithmetic at both edges. A transcription error fails the build.
6. Not modeled. Conversions with a nontaxable part, penalty exceptions other than age, inherited Roth IRAs, Roth 401(k) accounts (a separate clock per plan), recharacterizations, excess contributions, and state tax. Educational, not advice.

Sources.

1. 1. United States Code (Cornell LII), 26 U.S.C. § 408A(d) — Roth IRAs: distribution rules. That a qualified distribution requires the five-taxable-year period beginning with the first year a contribution was made to any Roth IRA, and age 59½, death, disability, or a first home (d)(2); that converted amounts withdrawn within five taxable years of the conversion are subject to the § 72(t) additional tax as if includible in income (d)(3)(F); and the ordering rule: contributions first, then conversions first-in first-out with the taxable part first, then earnings (d)(4). Retrieved September 6, 2026; verified September 6, 2026.
2. 2. United States Code (Cornell LII), 26 U.S.C. § 72(t) — 10-percent additional tax on early distributions. The 10 percent additional tax, and the exceptions from it including distributions after age 59½, death, disability, and substantially equal periodic payments. Retrieved September 6, 2026; verified September 6, 2026.
3. 3. Internal Revenue Service, Publication 590-B, Distributions from Individual Retirement Arrangements — Roth IRAs: qualified distributions, ordering rules, and Form 8606. The Service's worked statement of the same rules: the five-year period, the ordering of a nonqualified distribution, and the reporting on Form 8606 Part III. Retrieved September 6, 2026; verified September 6, 2026.

Revision history.

The record's history.

September 6, 2026

First release: both clocks, the qualified-distribution test, and the ordering of a withdrawal across contributions, two conversions, and earnings, with the tax and penalty on each layer.

Canonical address: https://consideratecapital.com/tools/roth-five-year-rule