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Even with a traditional IRA I believe you'll still be 'stuck' with the 10% penalty unless you use a 72(t) distribution plan. Geez, I'd hate to pay income tax PLUS 10%!

At least with the Roth you can withdraw your contributions tax-free prior to age 59 1/2.

If I were in your shoes, I'd combine a Roth with a taxable account for my investment savings.


Roth IRAs are complex for the would-be early retiree:

Withdrawals of contributions - tax free, penalty free
Early withdrawal of earnings - taxed as ordinary income, possibly subject to penalty
Fully qualifying withdrawal of earnings - tax free, penalty free

To the extent that earnings will be long-term capital gains and withdrawn "early" (as defined by the IRS), the Roth is quite possibly inferior to a taxable account. Even with a 72(t) plan.

(For the same circumstances, a conventional IRA has a small but real advantage over a taxable account. If some of your investing will be SHORT-term, that's where IRAs and 401Ks really shine.)
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