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re: Roth IRA- is it considered a liquid asset
Posted on 1/15/13 at 9:27 pm to Vols&Shaft83
Posted on 1/15/13 at 9:27 pm to Vols&Shaft83
quote:
A Roth SHOULD NOT be an emergency fund.
Completely wrong.
It should be your second line of defense. You can pull out contributions at any time without any penalty whatsoever. In the meantime earnings are tax free. If you instead put money in a regular account you are paying taxes you don't have to pay if you'd put into a Roth.
Your first line of defense should be easy access to credit that you can quickly repay. There's nothing wrong with charging a thousand on your credit card provided you can pay it off with the next statement.
But there is basically no reason at all to have a standard savings account unless you're already maxing your Roth and have nothing better to do with extra cash.
1
Posted on 1/16/13 at 5:01 am to foshizzle
I completely disagree, yes you can withdraw without penalty, but you can't put the money back in, thus sacrificing potential long term gains. Why would you do that if you had liquid cash in a savings or money market account? You can replace those funds whenever you want.
I've always considered emergency funds to be insurance,not an ininvestment.
I've always considered emergency funds to be insurance,not an ininvestment.
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