No. of Recommendations: 0
RustedSoul writes:

<<I was just looking over the current Roth regulations and it is not a pretty picture for persons retiring early. With a few exceptions, you can't take any earnings out before 59 1/2 tax/penalty free.

With a regular IRA, you can take distributions penalty free if they are made in "substantially equal payments over your lifetime" at any age. (Of course, the tax is still due).

I plan on retiring way before 59 1/2, so the Roth won't be a part of my portfolio.>>

I think you have missed a few points that will cause you to miss out on a possibly beneficial opportunity. First, if you retire earlier than age 59 1/2, nothing stops you from withdrawing your Roth contributions free of tax in any amount and at any time. Second, after the contributions have all been withdrawn you can still use the "substantially equal periodic payments" rules of Section 72(t) of the Infernal (sic) Revenue Code to tap into your earnings. In that regard, the Roth IRA is no different than a traditional IRA. Yes, you will pay tax on the earnings because you didn't wait until age 59 1/2 to take them; however, you won't be assessed the 10% penalty. And after the time for mandatory withdrawals has run, the earnings may then be taken tax-free. That ain't so with the traditional IRA.

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