Hesitant About a Roth Because of the 5-Year Rule? Here’s Why You Shouldn’t Be

The Roth IRA five-year rule is often misunderstood as an ironclad edict that locks your money away, out of your reach. In reality, it’s not the scary impediment that investors might fear.

A red door with the number 5 above the peep hole.
(Image credit: Getty Images)

Recommend a Roth conversion to some people, and you may encounter a touch of financial skepticism.

“What if I need my money all of a sudden?” they ask. “Won’t it be off-limits to me for five years?”

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Please remember that converting an employer plan account to a Roth IRA is a taxable event. Increased taxable income from the Roth IRA conversion may have several consequences including (but not limited to) a need for additional tax withholding or estimated tax payments, the loss of certain tax deductions and credits, and higher taxes on Social Security benefits and higher Medicare premiums. Be sure to consult with a qualified tax advisor before making any decisions regarding your IRA.


Investment advisory services made available through AE Wealth Management, LLC (AEWM). AEWM and Miller retirement group are not affiliated companies."


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The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

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Nate Miller, Investment Adviser Representative
President, Miller Retirement Group

Nate Miller is president of Miller Retirement Group. Miller has more than two decades of experience in the financial industry and holds insurance licenses in Kansas and Missouri. He also has passed the Series 65 exam and is registered as an Investment Adviser Representative in those same states. Miller also is the author of "The CPR Retirement Rescue Roadmap: Your Guide to Breathing Life Into Any Portfolio."