In this scenario you are basically putting all the earnings into the Roth, while keeping your contributions liquid. Of course it's more ideal to max out your roth every year, however some of us do not have $5000 of investable income every year.So in this situation you could contribute $5000, and later in the year take out $6000- without any payment of tax for this year, and hopefully deferring taxes out until retirement- so that they are tax free.So this results in a net outflow from the IRA, without any tax liability. This would be benficial to someone with a good amount of cash, and a low amount of desposable income.
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