I'm a bit hesitant in locking up 6k for so long because I plan on buying a house maybe in mid/late 20s to early 30s and could just put that extra money into personal portfolio and (contribute employee match or max into traditional ira each year) - curious to hear some professional opinions here
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Just as a note: the IRS allows you to use up to $10K from your IRA tax free if used to purchase your first home.
appreciate it bro, that sounds sweet and changes the equation a lot
You can withdraw your contributions early from a roth. Will 6k really make that big of a difference 6-8 years from now?
Yep but I know they apply annoying penalties if you withdraw early, with that being said - do you think its smart to do the 6k now that I still qualify?
No you pay penalties on your gains. Your contributions can be withdrawn without any issues.I generally think any money you can grow tax free for 30-40 years is a good idea.
Would second opinion that any tax-free money is worth it and won't heavily impact your ability to buy a house.
Also, FYI maximum is $6000 for FY2022 and $6500 for FY2023.
Do you know if roth IRA is by fiscal year? meaning I can do 6k now before the end of 2022 and another 6k in 2023 since IB starts in July and I will be under the dollar amount income limit
Yes, that’s right. You can also get around the income limit by contributing to a traditional IRA and then rolling over to a Roth IRA.
6k isn't much in the grand scheme of things, can put that in if you have it liquid. Once you start I would generally direct some of your savings into personal if you want to buy a house in a few years (i.e. meet the employee match, but not absolute max of traditional IRA) as the withdrawal penalties beyond the $10k allowance will really bite
Appreciate the advice. Do you max out your IRA or just do up to the employee match? My 6k is liquid, I have a bit of savings and have nowhere to invest it given the rough public markets so I have just been buying a bunch of treasury bills for the tax incentives but having it completely tax free in a roth would be great
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