isn't the limit kind of useless? Anyone can get money into roth.

Jan 20, 2023
10:53:27am

SalmonOfCapistrano All-American

You get the 5 year holding period if you use the pass through method, but that's pretty much the only difference, right?

This message has been modified

Originally posted on Jan 20, 2023 at 10:53:27am

Message modified by SalmonOfCapistrano on Jan 20, 2023 at 10:54:22am

Report problem with this ad

SalmonOfCapistrano

Previous username: Pedant
Bio page: SalmonOfCapistrano
Joined: Feb 1, 2012
Last login: May 6, 2024
Total posts: 10,725 (74 FO)

Report problem with this ad

Messages

Author

Time

Is a Roth IRA a good idea for an emergency savings? I understand you can pull

RGGeemer

1/20/23 10:36am

They need to raise the income limit for a Roth

cheezedawg

1/20/23 10:38am

It's insane that there is an income limit to begin with on a Roth

Skeptical Optimist

1/20/23 10:47am

isn't the limit kind of useless? Anyone can get money into roth.

SalmonOfCapistrano

1/20/23 10:53am

Never been a problem for me

supertux

1/20/23 10:55am

If only they raised it as fast as they are raising the social security limit

cougaman

1/20/23 11:24am

It's stupid that the married limit is way less than double what it is for

JuicyJam

1/20/23 11:27am

That is odd

RGGeemer

1/20/23 11:28am

Even Roth IRAs have a 10% early withdrawal penalty

Bainge

1/20/23 10:38am

Not on contributions, right? Just on earnings?

RGGeemer

1/20/23 10:38am

you should be able to withdraw contributions without penalty

LeonMarek

1/20/23 10:39am

<< Deleted >>

Bainge

1/20/23 10:40am

Don't think that's true.

RGGeemer

1/20/23 10:41am

Yeah I am getting mixed answers so I deleted it

Bainge

1/20/23 10:42am

False. Doesn't apply to contributions.

supertux

1/20/23 10:43am

Correct, I have taken funds out w/o penalty

PortlandCoug

1/20/23 10:51am

No. Roth's have a 10% early withdrawal penalty unless held 5 years or taken

JAGA97

1/20/23 10:38am

Not true. You can pull contributions at any time.

VenturaCoug

1/20/23 10:39am

RE: No. Roth's have a 10% early withdrawal penalty unless held 5 years or taken

RGGeemer

1/20/23 10:41am

Yes, it’s a good idea, but you may be forced to pull from depressed investments.

VenturaCoug

1/20/23 10:38am

Yeah this is the real issue. Good chances you need those funds when the market is down.

supertux

1/20/23 10:40am

So is a 1% savings account a better idea than a Roth IRA for emergency savings?

RGGeemer

1/20/23 10:42am

No, but 4% might be. It just depends.

supertux

1/20/23 10:44am

But you can put it into a Roth at vanguard and get 4% in vanguard federal money market. Best of both worlds. Maybe keep

supertux

1/20/23 10:44am

That sounds good. My Roth IRA is with fidelity, is there an equivalent MM there?

RGGeemer

1/20/23 10:46am

Sure

supertux

1/20/23 10:48am

I think the way to look at it is the Roth maybe justifies a slightly smaller

VenturaCoug

1/20/23 10:45am

Bask bank is a good one

supertux

1/20/23 10:46am

But yeah I would keep some in savings and excess in Roth. Want to minimize the chances of needing to use the Roth.

supertux

1/20/23 10:50am

I pulled a small amount last year to cover some grad school expenses literally

LeonMarek

1/20/23 10:53am

Sure. Why not? Just make sure you keep proof of contributions and keep track of any withdrawals you make.

supertux

1/20/23 10:39am

My understanding is that you can pull out the contributions without penalty but

PokeMAN

1/20/23 10:41am

Can use HSA too. Build up your hsa and save receipts, but this has the same

VenturaCoug

1/20/23 10:41am

At a minimum, you can put in contributions and keep in cash

Cougforgood

1/20/23 10:44am

Yep or some decent money market funds right now. Vanguards federal one is like 4%

supertux

1/20/23 10:46am

I keep my pure EMERGENCY 6 months savings in an online HY Savings account

The Dark Knight

1/20/23 10:49am

Didn't realize savings account interest rates were so high. That makes more

RGGeemer

1/20/23 10:51am

What online HY Company are you using?

PokeMAN

1/20/23 10:53am

Discover

Posting on CougarBoard