Will My Roth IRA Conversion Be Penalty Free?

Categories: Adding money to a qualified plan, Removing money from a qualified plan, Roth IRA, Traditional IRA

Converting a portion of an IRA to a Roth IRA is complex process that involves many moving parts and can have some unintended consequences if not properly handled, including a possible impact on Medicare premiums two years after the conversion.

To help make this easier, we have created the “Will My Roth IRA Conversion Be Penalty Free? flowchart. It addresses common issues that occur when doing a Roth conversion:

  • Implications for IRAs with nondeductible IRA contributions
  • Pro-rata and aggregation rules
  • Simple IRA rules
  • Medicare Part B and Part D surcharge impact
  • 5 year rule on the Roth IRA
  • 5 year rule on the conversion
  • RMD coordination issues

Updated for 2019