I've been reading the Foolish Retirement plan primer and still Im not absolutely certain. What I want to do is save for my kids education through a Roth IRA. Why not education IRA you ask? Well, because its less flexible (500 limit/yr, only used for education or taxed, shows up as kids income when it comes times to apply for financial aid, etc, etc.)On pg. 4 of the retirement planner, itemized bullet 7. it says you won't get charged the 10% penalty for withdrawal from an IRA before age 59.5 if you're paying for higher education expenses. I assume this applies to Roth IRAs as well?But will I still get charged regular income tax on the Roth IRA withdrawal if taken before age 59.5 for higher education expenses? thanks for any clarification. the reason i went down this path in the first place is because of the article in November's copy of Money magazine. It suggests Roth IRA as an option for paying college costs, but it too is not crystal clear on all the issues.***Your contributions to a Roth are not taxable, no matter when you take distributions. Qualified distributions from a Roth are not taxable at any time.A qualified distribution is, generally, any payment or distribution from your Roth IRA made after the 5-taxable-year period described below under 5-year rule, and:Made on or after the date you reach age 591/2,Made because you are disabled,Made to a beneficiary or to your estate after your death, orThat meets the requirements for First home (up to a $10,000 lifetime limit).There is nothing wrong with using what you had contributed to your Roth, through the years, for education purposes. This would leave the accumulations to accumulate tax free income. If you were to dip into those accumulations, for qualifying education purposes, you would have to pay income tax but no penalty would be attached.Although education qualifies for exclusion from the penalty, it will not qualify as a tax free distributionas might be the case with a qualified distribution for the purpose of purchasing a first home."Jack"
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