Hello MMM forum -
I have a few questions about Roth IRA contributions, conversions, and withdrawals, and haven't been able to track down answers through my own research. Given the wisdom on this forum, I thought I'd see if anyone here could helpfully lend some insight. Here it goes....
I have 2 Roth IRA accounts:
- Bank of America (opened January 2008) / total contributions $100 / current balance $103
- Vanguard (opened January 2014) / total contributions ZERO / total conversions $11,000 (5,500 converted Jan 2014; 5,500 converted Jan 2015)
I am 36 y.o. My income since 2010 and for the foreseeable future has made me ineligible for direct Roth IRA
contributions; hence the Roth IRA
conversions beginning in Jan 2014 by way of non-deductible Traditional IRA contribution then "backdoor" conversion to a Roth IRA. The $100 contribution to the BOFA Roth IRA in 2008 was made in a fleeting moment of foresight back when I was a student and had minimal income; sadly, I never made any further contributions in those pre-Mustachian days. Now for the questions:
I can only withdraw, without penalty or tax, $100 from either/both of these Roth IRA accounts because that is the only contribution that I have made -- correct?
Along similar lines, any future conversion amounts to the Vanguard Roth IRA via backdoor, e.g., $6,000 for tax year 2015, would not withdraw-able without penalty or taxes, correct?
If, however, I make a withdrawal from the Vanguard Roth IRA account for a first-time home purchase, does the 5-year rule entitle me to withdraw up to $10,000? This would be because 5 years have elapsed since the initial BOFA Roth IRA account was opened, notwithstanding the Vanguard account being under 5 years old.
Any thoughts would be most welcome - I truly appreciate it!