If you have learned anything about Roth IRAs, you know that one of their main advantages is tax -free retirement income. But what if you don’t want to wait until you’re 80 to pull funds? Simple. Don’t wait. Of all the uses of Roth IRAs, retirement income is just one. You can also generally use the funds to pay for higher education expenses for you or a loved one, you can withdraw up to $10,000 for the down payment on your first home, and after the Roth IRA has been in existence for five years, you can pull out your contributions, or your “basis”, without tax penalties. Obviously, you need to run all of these ideas by your tax advisor to make sure that they make good tax sense. And you also want to run your ideas by your financial advisor to make sure that that is the most efficient place to get the necessary dollars for current spending of any kind.
But you don’t need to get pigeon-holed into the false notion that once you fund a Roth IRA, those dollars can never be touched.
Any opinions are those of Tim Weddle and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Past performance does not guarantee future results. Roth IRA owners must be 59 ½ or older and have held the IRA for five years before tax-free withdrawals are permitted. IRA tax deductibility and contribution eligibility may be restricted if your income exceeds certain limits, please consult with a financial professional for more information.