Quote:
Originally Posted by lewdog
Wanna know how many here use their Roth also as an emergency savings vehicle like this article suggests since contributions can be withdrawn tax/penalty free? I see this posted a lot lately and it makes sense for many I would think after you have a savings account emergency fund but still wanna have an option to stay relatively liquid without parking in a savings account and getting nothing. Any of you do this? What kind of funds do you use?
https://blog.mint.com/saving/does-us...d-idea-052012/ |
Quite honestly, Roth assets are the last place you should tap for funds. These are precious assets that will grow tax free for life. No tax on dividends, interest and market appreciation, depending on your investment of choice. It is hard to accumulate funds in Roth accounts unless you do an IRA conversion (which I did) and pay the ordinary income tax at the time of conversion. While that was painful, I now have a 30% gain that will never be taxed. For those thinking about estate planning, Roth assets can be given to your kids and they can take distributions over their lifetime. The other major benefit of Roth vs. Traditional IRA's is that there are no required minimum distributions at age 70.5. So they can continue to grow tax free for a very long time. Don't take assets out of your Roth if you can possible help it.