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Personal Finances / Buying or Selling a Home


Subject:  Re: When can I qualify for a loan? Date:  4/27/2013  12:49 PM
Author:  EvanED Number:  125186 of 128295


If you take money from an IRA and redeposit it in an IRA within 60 days, that's a rollover.

That's what I meant by "essentially borrow". I brought that up in the context of the "fairly big ticket" repair item, like a furnace. I would have to withdraw the money for the repair, but during that 60-day span I would likely earn enough (especially if I especially tried to be frugal) to be able to redeposit it in full. (My estimate of how much I could afford to do this and still make it back in time to recontribute is either $8K or $13K depending on when it happens.)

Yes, I know the IRS would call that a rollover. Yes, I know it's limited to 60 days. Maybe you disagree with me saying "borrow" before. But to me, it walks and quacks like borrowing -- I take money out, use it, and a little bit later put it back. (Perhaps in a separate account.)

IRAs are retirement accounts, not piggy banks to be raided when you can't live without a Twinkie and have to run down the alley to Paul's Grocery to get a package.

Yes, I definitely get that's the idea. However, what I would say is that in my case the situation is a little bit complicated. It's complicated because as a grad student I haven't really had the opportunity to build both an actual emergency fund and a retirement account. I really wanted to contribute to some retirement account (esp. because I guessed that the time I opened it was a good time to get into the stock market, and it was), but I couldn't have done so for a couple additional years if I built up an explicit emergency fund. I chose the Roth specifically because you can withdraw your contributions without penalty -- that was my backup in case something went horribly awry. (And to be clear, I've never had to tap it.)

Because of that, the Roth to me currently serves a dual role -- it is both a retirement account and emergency fund. It's not really a matter of "don't treat your Roth as an e fund" because that ignores the above reality. The question really is: At some point in the future this will change, and it will become a "pure" retirement account -- when will this happen? My argument is it's not totally unreasonable to say "a few months after I buy a house".

You seem to be arguing tha