4 ms·

You can take your contributions (the principal, not the growth) out of a Roth account before you reach retirement age. The exact rules are complicated, but that

You can take your contributions (the principal, not the growth) out of a Roth account before you reach retirement age. The exact rules are complicated, but that's the big core benefit that has me putting money in a Roth. I can use it to retire at 40, or cash out some of it to make a down payment on a house.

tcoppi 10y ago
If you decide to retire early you can always set up a Roth conversion ladder by rolling over IRAs and 401ks to Roth IRAs. It takes 5 years for those contributions to "season" so that you can take them out before 59.5, but you can take out capital gains that way as well. No need to contribute to a Roth today if that doesn't make sense otherwise.
- tedmiston 10y ago
  Can you elaborate on this? I've been managing a post-tax account somewhat like a Roth IRA, though it is not an IRA because I plan to retire far before 59 1/2. I'm hoping for something in the middle of the two approaches with flexibility to withdraw early without penalty.
  - tcoppi 10y ago
    This is the most concise summary I've seen, but you can find some more discussion googling around for "Roth Conversion Ladder" - http://retireby40.org/roth-ira-conversion-ladder-minimize-taxes/ http://retireby40.org/roth-ira-conversion-ladder-minimize-ta...
pilom 10y ago
You can also take your principal (and earnings) out of a traditional IRA penalty free if you work through the loopholes. http://www.madfientist.com/how-to-access-retirement-funds-early/ http://www.madfientist.com/how-to-access-retirement-funds-ea...
- g52oevr0in 10y ago
  This is info people should be aware of, but it doesn't help me if I only have money in a traditional IRA and want to use $100k for a down payment on a house.
  - nfriedly 10y ago
    Actually, I think buying a (first) house is one of the loopholes. From the linked article: > "...you can withdraw retirement account money early to pay for education expenses, fund a first-time home purchase, ..."
    - g52oevr0in 10y ago
      Only up to $10k. I can withdraw $10k from my traditional IRA using that loophole, then a lot more from my roth.
deleted 10y ago
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tcoppi 10y ago

If you decide to retire early you can always set up a Roth conversion ladder by rolling over IRAs and 401ks to Roth IRAs. It takes 5 years for those contributions to "season" so that you can take them out before 59.5, but you can take out capital gains that way as well. No need to contribute to a Roth today if that doesn't make sense otherwise.

tedmiston 10y ago
Can you elaborate on this? I've been managing a post-tax account somewhat like a Roth IRA, though it is not an IRA because I plan to retire far before 59 1/2. I'm hoping for something in the middle of the two approaches with flexibility to withdraw early without penalty.
- tcoppi 10y ago
  This is the most concise summary I've seen, but you can find some more discussion googling around for "Roth Conversion Ladder" - http://retireby40.org/roth-ira-conversion-ladder-minimize-taxes/ http://retireby40.org/roth-ira-conversion-ladder-minimize-ta...

pilom 10y ago

You can also take your principal (and earnings) out of a traditional IRA penalty free if you work through the loopholes. http://www.madfientist.com/how-to-access-retirement-funds-early/ http://www.madfientist.com/how-to-access-retirement-funds-ea...

g52oevr0in 10y ago
This is info people should be aware of, but it doesn't help me if I only have money in a traditional IRA and want to use $100k for a down payment on a house.
- nfriedly 10y ago
  Actually, I think buying a (first) house is one of the loopholes. From the linked article: > "...you can withdraw retirement account money early to pay for education expenses, fund a first-time home purchase, ..."
  - g52oevr0in 10y ago
    Only up to $10k. I can withdraw $10k from my traditional IRA using that loophole, then a lot more from my roth.

deleted 10y ago

[deleted]