Today, we continue last week’s discussion of 15 Things You Should Know about the Roth IRA, with Part 2.

You can not take a required minimum distribution from an IRA and turn it into a conversion, you have to deposit it somewhere else. The ideal scenario is to preemptively convert all your IRA’s to Roth IRA’s before you would want to.

Roth conversions have to be done before December 31 but that makes it a real challenge to know what your modified adjusted gross income will be for the year by that time of the year.

With traditional Roth IRA’s, you have the ability to make up your mind in terms of contributions until April 15th of the following year.

You can’t recharacterize your Roth IRA anymore. You now have to work with the hand the market deals you in any given year.

Roth IRA’s don’t have any required minimum distributions during your lifetime and if you die that still applies, but if you die and the account goes to a non-spouse beneficiary they do have to take distributions. This may change when the SECURE Retirement Act gets signed into law at some point in 2019.

Roth IRA’s have a 5 year rule. Whatever money you contribute to your Roth IRA, you can take out and return as long as you put it back in within 60 days. The 5-year rule says that you cannot touch the growth on your account until 5 years have passed or you are 59½ years old.

Roth conversions also have a 5 year rule. If you convert $100,000, you can’t touch that money for a minimum of 5 years without suffering a penalty. Technically this rule is also a way to take money out your account penalty free if you are younger than 59½ years old as long as you wait 5 years. The rule no longer applies once you are over the age of 59½ years old.