I've read through the "All About IRAs" question and answer sections, as well as some posts on this subject, but am still fuzzy on whether or not you can withdraw from a Roth within 5 years for a first time home purchase. It sounds like you can withdraw your contributions without any penalty, but would have to pay tax on the earnings if they were withdrawn within 5 years.Here's the situation. My sister is 25 and has yet to start saving in an IRA or 401(k). In addition, she would like to purchase a home in the next 2 years. Would it be wise to still open a Roth now, take out her conributions in 2 years and leave the earnings there? Could she accomplish that without penalty? Or, would she simply be better off investing in a non-IRA type vehicle?Thanks in advance!
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