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Roy Lewis' four part series on the Roth in the Tax Q&A were very helpful in understanding the power of the Roth.

One major point remains that I do not fully understand:
can you still make qualified distributions to pay for higher education expenses ??

Roy's info was dated Feb 98 and I understand that congress made some changes in July. Did this rule get the axe ? My wife and I plan to have kids someday and I would love to plan for part of retirement AND college with a single vehicle.

Thanks in advance for any help anyone can give. ( Site recommendations are a plus !!!! )
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Greetings, FoolishGriggs, and welcome. You asked:

Roy Lewis' four part series on the Roth in the Tax Q&A were very helpful in understanding the power of the Roth.

One major point remains that I do not fully understand:
can you still make qualified distributions to pay for higher education expenses ??

Roy's info was dated Feb 98 and I understand that congress made some changes in July. Did this rule get the axe ? My wife and I plan to have kids someday and I would love to plan for part of retirement AND college with a single vehicle.


When it comes to education expenses, you may withdraw your contributions at any time without paying taxes. If the account has been open at least five tax-years, then you may withdraw the earnings for use against higher education expenses without penalty, but you will have to pay ordinary income taxes on those withdrawals if you're younger than age 59 1/2. In that respect, the Roth is no different than a traditional IRA.

Regards....Pixy
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Dear FoolishGriggs - Regarding Roth/IRA & using it for college savings... I like it! Because you save with after-tax monies, all gains will be tax-free if taken after age 59 1/2. Sure, but what about college funding? Well, if your Roth account is over 5 years old you'll be allowed to withdraw the contributions without penalty (or tax) for any reason. The gains may also be taken out for educational expenses for the account owner, spouse, child, or grandchild without the usual 10% penalty, however you may be subject to taxation... A great idea, this Roth, because it isn't an asset in the student's name (it's your retirement account), and your use of its funds may not prevent you from using the HOPE Scholarship, or Lifetime Learning Tax Credit! And if you don't need to draw from it, you'll have it for your retirement... Best wishes. PP
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