Five-Year Rule (Roth)
RetirementThe requirement that a Roth IRA must be open for at least 5 tax years before earnings can be withdrawn tax-free.
Example
Example: For someone with $300,000 in retirement savings planning to retire at 65, five-year rule (roth) directly affects their strategy. Since it involves the requirement that a roth ira must be open for at least 5 tax years before earnings can, understanding this concept could mean an extra $50,000-$100,000 in retirement assets. Plan with our retirement calculator.