Life and Death Planning for Retirement Benefits

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Chapter 5: Roth Retirement Plans 241
3. 457(b) plans maintained by a State, political subdivision of a State, and any agency
or instrumentality of a State or political subdivision of a State. (first
sentence) This type of plan is called in this book
a “governmental 457(b) plan.” Rollovers from a nongovernmental 457 plan
to a Roth IRA are not permitted.
Se as amended by PPA ’06, § 824. This change rendered Reg A-
5, obsolete.
5.4.02 Who may convert: age, plan participation, income, etc.
This explains who is eligible to convert a plan or IRA to a Roth IRA, including
the effects (or noneffects) of age (A), participation in other plans (B), prior conversions (C), filing
status (D), and income (E).
If a person converts a traditional IRA or plan to a Roth IRA but is not eligible to do so (for
example, if he reconverts a traditional IRA to a Roth too soon after recharacterizing; see “C”), the
result is a “failed conversion.” See Prior to 2010, a person could be ineligible to convert
to a Roth based on his filing status (“D”) or income (“E”).
A. Age: Under 59½, over 70½, or in between. Any IRA owner or plan participant can
convert his traditional plan or IRA to a Roth IRA regardless of his age; you are never too
young or too old to convert to a Roth IRA. However, if the participant is under age 59½,
see ¶ 5.5 regarding how the 10 percent penalty on early distributions applies to certain post-
conversion distributions. Also, an individual who is turning (or is past) age 70½ in the
conversion year must take the RMD for that year before he can convert any money from
the account to a Roth IRA; see E).
B. Participation in other plan(s). An individual can convert his traditional plan or IRA to a
Roth regardless of what other plan(s) he may be participating in that year.
C. Prior conversion. There is generally no limit on the number of times a participant can
convert all or part of any traditional plan or IRA to a Roth IRA. A person who converts
part of his traditional IRA to a Roth IRA is free at any later time (in the same or a later
year) to convert more of the same or another plan or IRA to a Roth IRA. The only exception
is a waiting period that applies to someone who has unconverted (recharacterized) and then
wants to reconvert the same amount; see
D. Filing status. For conversion of plan distributions made in 2010 and later years, there is
no filing status test; anyone can convert regardless of his income tax filing status. For years
prior to 2010, a person who used the filing status “married filing separately” could not do
a Roth conversion. See the Special Report: Ancient History .
E. Income limit. For conversion of plan distributions made in 2010 and later years, there is
no income test; anyone can convert regardless of his income level. For distributions
occurring in years prior to 2010, an individual was not eligible to convert if his modified
adjusted gross income exceeded $100,000. For details, including how MAGI was