What is the five-year rule for Roth IRAs?

The five-year rule requires that your Roth IRA be open for at least five tax years before you can withdraw earnings tax-free. The clock starts January 1 of the first tax year for which you made a Roth IRA contribution. Each conversion from a Traditional IRA to a Roth has its own separate five-year clock for the 10% penalty. Opening a Roth IRA as early as possible — even with a small initial contribution — starts the clock running.