What are the two separate five-year clocks for Roth IRAs and why do both matter?

The first clock governs tax-free earnings: your Roth must be open five tax years before earnings can be withdrawn tax-free, and this clock starts with your very first Roth contribution to any Roth IRA, then never resets. The second clock applies to each Roth conversion separately: converted amounts must season five years before you can withdraw them penalty-free if you're under 59 and a half, to stop people from dodging the early-withdrawal penalty by converting first. Once you're over 59 and a half, the conversion clock no longer matters. These rules trip up early retirees using conversion ladders, so track the dates carefully. The IRS spells out the ordering rules for Roth distributions.