I have a question regarding the five year rule for Roth IRA Withdrawals. My wife and I are both 33 years old.
In November 2012, I converted the following retirement funds from an old job into a single Roth IRA at Fidelity and paid taxes (with outside cash) on the applicable portions:
- Roth 401k = $58,923 (contributions = $48,125)
Before Tax 401k = $19,760
Company Match (considered before tax) = $26,869
Supplemental (considered before tax) = $2,807
In April 2013, I contributed $5,000 to the same Roth IRA, and my wife contributed $5,000 to open a new Roth IRA in her name. Both contributions were made for tax year 2012. At that point we had converted or contributed a total of $118,359 to the two Roth IRA accounts. We have made no other contributions/conversions/withdrawals to either Roth IRA.
The value of my Roth IRA is currently $334,000, and the value of my wife's Roth IRA is currently $29,000.
We would like to withdraw the $118,359 in conversions/contributions tax-free and penalty-free as I believe both the conversions and contributions are considered to be at least five years ago. Can we simply withdrawal up to $118,359 tax-free and penalty-free, or do I need to worry about the breakdown of the $108,359 in terms of contributions/earnings prior to the November 2012 conversion?
Also, if we're able to withdrawal the full $118,359 tax-free and penalty-free, can I simply withdrawal those funds from my Roth IRA, or do I have to withdrawal $5,000 from my wife's Roth IRA and $113,359 from my Roth IRA?
Thanks so much for the help!