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Investing mistake :( [with pull]

edro

edro

Lifer
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.
 
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.
Click to expand...

I believe this is correct - House, college education, etc
 
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.
Click to expand...

And if you are the first time buyer, you have more options.
 
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?
 
Originally posted by: edi sucks
its only 5 years, forget about it for now...
Click to expand...

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.
 
Originally posted by: edro13
Originally posted by: edi sucks
its only 5 years, forget about it for now...
Click to expand...

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.
Click to expand...

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.
 
Originally posted by: SearchMaster
Originally posted by: edro13
Originally posted by: edi sucks
its only 5 years, forget about it for now...
Click to expand...

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.
Click to expand...

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.
Click to expand...

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.
 
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