Roth IRA 5-Year Rule

[MarkC625765]

I currently have a ROTH IRA account with major Financial Institution A.  I opened and funded this ROTH IRA account in 1998, so I have satisfied the ROTH IRA 5-Year Rules concerning tax-free withdrawals of earnings.  I am thinking of moving this ROTH IRA account to major Financial Institution B.  Will the ROTH IRA 5-year rule clock start over at zero for the new ROTH IRA account?

[GailL1]

Not as long as you do a TRANFER from one institution to the other - 

When you do an IRA transfer, you're effectively moving your money between two similar/like accounts, so from a ROTH IRA account into another. For instance, you may decide to move your IRA from Firm A to an IRA account with Firm B. In this case, the account type doesn't change but the financial institution that holds your account does.

Roth IRAs can be transferred to a new custodian tax- and penalty-free if you follow IRS rules. A direct transfer between two custodians—or financial institutions—is the safest way to move Roth IRA funds from one retirement account to another. A transfer must be deposited in the new account within 60 days.

In this regards, you are doing an institution to institution TRANSFER and you will not even touch the funds at all.  The receiving institution, once you have submitted the paperwork to them, handles the transfer of a ROTH IRA account to another ROTH IRA account at their institution.

This is different than a “rollover”. 

Investopedia- IRA TRANSFER:  Definition, How it works