Investing mistake :( [with pull]

[edro]

So I had been investigating IRAs for a while and decided that a Roth IRA would be perfect for me, because I am wanting to buy a house in about 3 years.

Sooo... I put a few grand in an IRA, and for he last few months I have been happy with the return and all that.

Well, I had an epiphany the other night and thought... "I wonder if there is a limit on how soon I can withdraw this?"

Sooo... I called the people my IRA is through and they said 5 years! Doh!

So now, I can:
1. Forget about that money and take it out later.
2. Wait for 5 years and have a larger down payment.
3. Stick to my plan and just withdraw it early and take a penalty.
3. Shoot myself and not have to worry about anything.

 

[Aimster]

2. Wait for 5 years and have a larger down payment.

 

[GeekDrew]

#2

 

[LeiZaK]

1. Forget about that money and take it out later.

why didn't you make a poll?

 

[DaveSimmons]

Leave the money in, fewer catfood dinners when you retire. Or at least the fancy "wet" food instead of kibble.

 

[LordSnailz]

Are you sure there's a penalty, some places do allow you to take money out for big purchases such as a house.

 

[beer]

Originally posted by: LordSnailz
Are you sure there's a penalty, some places do allow you to take money out for big purchases such as a house.

I believe this is correct - House, college education, etc

 

[crystal]

Originally posted by: LordSnailz
Are you sure there's a penalty, some places do allow you to take money out for big purchases such as a house.

And if you are the first time buyer, you have more options.

 

[CPA]

I'm the only one who chose option number 4? WTH, you guys are being nice today.

 

[Sex Smurf]

Originally posted by: CPA
I'm the only one who chose option number 4? WTH, you guys are being nice today.

2 votes now

 

[LordSnailz]

Originally posted by: CPA
I'm the only one who chose option number 4? WTH, you guys are being nice today.

Had enough coffee today

 

[tfinch2]

Originally posted by: CPA
I'm the only one who chose option number 4? WTH, you guys are being nice today.

Is that the kind of advice to expect from a CPA?

 

[Sex Smurf]

Originally posted by: tfinch2

Originally posted by: CPA
I'm the only one who chose option number 4? WTH, you guys are being nice today.

Is that the kind of advice to expect from a CPA?

It's what you get for NOT asking the CPA first.

 

[Toasthead]

i saw forget about it altogether.

 

[isasir]

I thought the deal was that you can't take out early from IRAs, but 401ks you can borrow against for purchases like a house?

 

[edi sucks]

its only 5 years, forget about it for now...

 

[edro]

Originally posted by: edi sucks
its only 5 years, forget about it for now...

But by then I will be 27 and I would like to stick to my timeline of getting a house when I am 25. I know it sounds stupid, but when I have a goal, I like to make it.

 

[SearchMaster]

Originally posted by: edro13

Originally posted by: edi sucks
its only 5 years, forget about it for now...

But by then I will be 27 and I would like to stick to my timeline of getting a house when I am 25. I know it sounds stupid, but when I have a goal, I like to make it.

If it's that important, find another income source or a way to make your primary income stream grow faster. You'd be better off anyway just leaving the money in the IRA and considering the downpayment as a different target.

 

[DJFuji]

Originally posted by: SearchMaster

Originally posted by: edro13

Originally posted by: edi sucks
its only 5 years, forget about it for now...

But by then I will be 27 and I would like to stick to my timeline of getting a house when I am 25. I know it sounds stupid, but when I have a goal, I like to make it.

If it's that important, find another income source or a way to make your primary income stream grow faster. You'd be better off anyway just leaving the money in the IRA and considering the downpayment as a different target.

Find a calculator online that shows the compound interest ratio of what $1 now will mean by the time you're ready to retire. It's so ridiculously high that you'd be hard pressed to justify taking money out of your roth to fund a down payment on a house. IIRC you can't put that money back in...meaning that your opportunity cost for taking that money out is VERY high. It's kind of like taking money out of your "yahoo fund" in the pre-internet days to finance a new car.

And if you're ~22 now, it's unlikely you have much in an IRA anyway (relatively speaking).

Unless you plan to be poor all your life, you won't want the extra tax burden of retirement income at 65 or older. I plan to be wealthy before 65. The last thing i need is more taxable income at the highest tax bracket at that age.

 

[HardcoreRobot]

its a retirement account, take it out when you retire