I have a Roth question, particularly related to the 5-year seasoning rule.
My father, who is retiring in October at 67, has about $8k in Roth contributions in a 401k, but does not currently have a Roth IRA.
Question 1: If he rolls those 401k Roth contributions into a Roth IRA, will he need to wait 5 years to take out those funds? If so, would it just be the earnings while it was in the 401k/IRA or just the earnings while in the IRA.
Question 2: He has about $1M in his traditional 401k and is thinking about doing Roth Conversion. If he decides to do a conversion this year, there would be no application of the other 5-year rule as he is older than 59 1/2, correct?
Question 3: If the rule mentioned in Question 2 still applies and is subject to the 10% early withdrawal tax, if he did a conversion this year, it would be treated at done on January 1, 2024, so he would need to wait until January 1,2029, correct?