Greetings, Ziebarth, and welcome. You asked: <<I know that five years after opening a Roth IRA, up to $10,000 dollars can be withdrawn penalty-free for 1st time homebuying expenses. i was wondering whether the $10,000 must be used for initial expenses (e.g. used for downpayment and closing costs) or whether it can be used anytime during the period when a home is being paid for. for example, could i open a roth in 2000, "buy" a home in 2003, and send in a $10,000 mortgage payment sometime in 2005? >>You're mixing apples and oranges. You do not have to wait five years to withdraw your annual contributions. They may be withdrawn at any time for any purpose free of tax or penalty. It's only when you have taken all of your annual contribution money and are into earnings that you have to worry. The first-time home purchase exemption can be used after your Roth has been open for five years to take earnings (but only after all contribution money has been taken first); however, you must use that money to pay actual acquisition costs, and you must do so within 120 days of the purchase. Therefore, you can not do what you propose with that exception for withdrawal of earnings.Regards..Pixy
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