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Pixy Wrote:
<<As to using the money for education or a new home purchase, keep in mind that all that's avoided when the withdrawal is for those purposes is the 10% penalty for early withdrawal. Ordinary income taxes must still be paid. Also, remember the home purchase withdrawal has a lifetime limit of $10K.>>

It's my understanding that for a contributory ROTH you
can withdraw contributions tax free and penalty free
at any time and for any reason.

This flexibility makes a ROTH more attractive for a 15
year old. If the money is needed for tuition in 3-7 years
or for a house in 10-15 years the contributions can be
used tax free, the earnings are still a nice jump start
to retirement. (After 3-7 years the contributions will still
be most of the value of the ROTH)

In a similar way a ROTH might be a suitable home for
my disaster fund. (The emergency fund deals with any
one emergency, if two or more emergencies occur at the
same time I may need the disaster fund.)
This assumes I don't have enough money to dedicate
the $2000 ROTH for investment and still have enough
left over for the disaster fund.
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