Chapter 6: What 59½ Changes
The worksheets from Chapter 6 of Fifty-Five. Type your own numbers, or try an example from the book to see how each one works.
Your exact 59½ date
The first day you can take money from any IRA or old 401(k) without the 10% additional tax.
The formula: Your birth date + 59 years + 6 months = Your 59½ date
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Birth year ______ + 59 = 59th birthday year ______
Birth month number ______ + 6 = ______ (if more than 12, subtract 12 and add 1 to the year)
Your 59½ date: Month ______ Day ______ Year ______
Walk through it, step by step
- Write your birth year on the first blank. Add 59. Write the answer on the second blank.
- Write your birth month as a number on the third blank. January is 1, February 2, March 3, April 4, May 5, June 6, July 7, August 8, September 9, October 10, November 11, December 12. Add 6.
- If that answer is 12 or less, it is your month. Keep the year from Step 1.
- If that answer is more than 12, subtract 12. The result is your month. Then add 1 to the year from Step 1.
- Copy your birth day of the month, unchanged.
- Write the month, day and year on the last line. That is your 59½ date.
- Do the same for your spouse. Each of you has your own date.
- If your birthday falls on the 29th, 30th or 31st, the matching month may be shorter. Confirm the exact date with your plan before you take money out.
Check your answer
- Count six months forward on a calendar from your 59th birthday, one month at a time. You should land on the same date.
- Your 59½ date is always on the same day of the month as your birthday.
- Take any withdrawal on or after this date, never the day before.
Figures this worksheet uses, and where they come from: Age 59½, when the 10% additional tax on early distributions stops applying (IRS, Retirement Topics: Exceptions to Tax on Early Distributions).
When your Roth earnings come out tax-free
The day your Roth IRA earnings can come out tax-free. You need two dates: your five-year date and your 59½ date. The later of the two is the one that counts.
The formula: Tax year of your first Roth IRA contribution + 5 = The year your clock finishes, on January 1. The later of your five-year date and your 59½ date = Your tax-free date for earnings
The calculator needs JavaScript. The paper worksheet below does not: it is the same arithmetic, written out.
The paper worksheet
Tax year of your first Roth IRA contribution ______ + 5 = ______. Five-year date: January 1, ______
Your 59½ date (from the worksheet above): ______________
The later of the two dates: ______________
Walk through it, step by step
- Find the tax year of your very first contribution to any Roth IRA. The oldest Form 5498 from your Roth IRA company shows it, or ask the company. Write it on the first blank.
- Add 5. Write the answer on the second blank and again after "January 1." That is your five-year date.
- If you have never contributed to a Roth IRA, your first contribution starts the clock. Make one this year and write this year on the first blank.
- Write your 59½ date from the worksheet above.
- Compare the two dates. Write whichever comes later on the last line.
- That is the first day your Roth IRA earnings can come out tax-free.
Check your answer
- Your five-year date is always January 1. If yours is any other day, you used the date you made the contribution instead of the tax year it counts for.
- Remember, the money you put in can come out any time, tax-free and penalty-free. This date is only about the earnings.
Figures this worksheet uses, and where they come from: The Roth IRA five-year rule: the clock starts January 1 of the tax year of the first contribution and runs five tax years (IRS, Publication 590-B); Age 59½ for tax-free Roth IRA earnings (IRS, Publication 590-B).