The Motley Fool Discussion Boards

Previous Page

Financial Planning / Wealth Creation Strategies


Subject:  Re: Funding my kids IRA Date:  8/17/2005  11:06 AM
Author:  Mark12547 Number:  32 of 84

Put it into a Roth IRA. That way it compounds tax-free in the worst case that they do pull it out at some point.

While the regular contributions can be pulled out at any time without tax or penalty, certain rules have to be followed to be able to pull out the earnings without tax or penalty.

Which -- if they use it for home purchase ...

There are certain rules about pulling out money for a "first time home purchase" (if one were not yet 59.5 years old and had a Roth IRA for at least 5 years), but that exempts the earnings from penalty, but one would pay income taxes on the earnings.

Copyright 1996-2018 trademark and the "Fool" logo is a trademark of The Motley Fool, Inc. Contact Us