The timing of converting money from a traditional IRA to a Roth can affect how long you must wait before you’re allowed to withdraw money without penalty. Getty Images By Brendan Pedersen, Staff Writer July 29, 2019Updated August 21, 2019 QIf you convert a traditional IRA to a Roth IRA, do early-withdrawal penalties apply?ARoth conversions are not subject to a 10% early-withdrawal penalty at the time of the conversion. But if you tap the converted amount, you need to be mindful of the five-year rule for penalties. The rule is simple: In order to withdraw the converted money penalty-free, you have to wait five years from the tax year in which you made the conversion if you’re younger than 59 1/2. In practice, that means if you convert a regular IRA to a Roth IRA in January 2020, you’ll need to wait until January 2025 to avoid early-withdrawal penalties. But depending on when you convert your account, you may not need to wait a full 60 months. If you convert an account in December 2020, the finish line doesn’t move: You’ll still need to wait until January 2025, but that means having 11 fewer months to wait. SEE ALSO: Roth IRA Contribution Limits for 2019 That’s straightforward enough, but what if you made a number of Roth conversions over the past several years? “The thing to be mindful of is that each conversion is subject to its own five-year rule,” says Mike Giefer, a certified financial planner and wealth manager with Creative Planning in Minneapolis. “Lots of people may systematically convert IRAs over multiple years, and the clock resets for each tax year.” If you converted one account in the final week of December and another in the first week of January, the latter will be subject to early-withdrawal penalties for an extra year. Advertisement But once you turn age 59 1/2 -- poof! -– the five-year rule for early-withdrawal penalties goes away. SEE ALSO: 3 Reasons to Convert an IRA to a Roth Converting a traditional retirement account to a Roth IRA is a great way to reap the benefit of tax-free withdrawals and an especially good idea if you expect your tax rate to be higher in retirement (although you may owe taxes on some or all of the amount when you convert it). Got a question? Ask Kiplinger at firstname.lastname@example.org.