S2Koupe

andrew, correct me if im wrong, but its my understanding that the benefit of the Roth IRA is that i can pull my CONTRIBUTIONS out whenever, penalty free, because ive already been taxed on what i put into the fund. its when i take distributions out from my EARNINGS is when i start to be penalized and taxed again.

also, ive stated that my goals are relatively short term (3-5 years potentially) with this money. im already saving for "retirement" with my 401k concurrently. whether or not 12% of my salary is enough to start with at age 28 for the sake of retirement is another issue.

but i think you have some good perspective on whats available in utilizing the money in the Roth. like i said, im leaning to putting as much as i can into my 2005 and 2006 IRA contributions, but im just looking for more opinions.

tritium_pie

[QUOTE=kadeshpa,Apr 8 2006, 03:58 PM] ^^^ that's only through 4/30.

remedyzrider

It's true, you can withdraw your contributions at any time; all capital gains must remain in the Roth or you will render the aformentioned penalties.

If your goal is to invest this money and use BOTH the initial contribution(s) and your gains within the next 3-5 years, the savings account would be the better option of the two. Why don't you consider investing in securities outside of an IRA? You seem to be focused on gaining more than 4% and are focused on an investment plan that's intended for retirement .

Investing your money in the market outside of an IRA seems to be the best possible option (assuming your risk tolerance is acceptable). Start an account with an online broker like scottrade, e-trade, etc... If this is too much risk for you, which I doubt since you're considering the Roth, 4% isn't a bad return.

Chris

kadeshpa

How can you keep your ING account open if as you stated "moved all my ING $ to HSBC". My understanding was that you needed to keep some money in ING to keep it active Plus if you keep on moving it around to the highest bidder throughout the year, it'll be a headache come tax prep time. I guess it's ok if you're working off of maybe 2-3 online savings schemes. I don't see there being a huge benefit though in moving it around. At most your playing with give or take 0.25%. Unless of course you're a mac-daddy and are playing with hundreds of thousands of dollars

tritium_pie

[QUOTE=kadeshpa,Apr 9 2006, 03:54 PM] How can you keep your ING account open if as you stated "moved all my ING $ to HSBC".

adam_gipson

After 5 years you can take up to 10K out of a ROTH for buying a home tax/penalty free.

00CivicSi

[QUOTE=kadeshpa,Apr 9 2006, 06:54 PM] How can you keep your ING account open if as you stated "moved all my ING $ to HSBC".

remedyzrider

That's just slightly misleading . After 5 years you can withdraw up to $10k out of a Roth for buying your first house, which must also be your primary residence.

Chris

S2Koupe

well, i stated above that the my main goal for what im putting into the Roth would be for buying my first home, and that may happen in 4-5 years, or more. so i want to be ready then. if the opportunity comes before then, well too bad. but if an opportunity comes in 4 years, then ill be kicking myself if i couldnt take advantage of the qualified distribution because i waited a week to start my roth in 2006. yes, im well aware of the april 17th deadline to open for 2005, thats why im asking now.

and also, at a rate of contributing $4000/yr, thats not a bad amount of money to have available "for rainy days" for contributions ALONE.

just to be clear, my main retirement savings is my 401k. im not treating the ROTH as my retirement vehicle, whether thats wise or not.

adam_gipson

And the 4k max was just last year, it'll be going up a bit.