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Taking contributions out of Roth IRA to buy land (updated 5/28/24 - not Roth)
Posted on 2/1/24 at 3:13 pm
Posted on 2/1/24 at 3:13 pm
I have found a piece of land I might want to buy for a future home. Has anyone taken contributions out of a ROTH IRA for a purpose like this? With interest rates where they are, I have a hard time borrowing money right now.
I realize removing ROTH money is not generally a good idea until you are in retirement mode, but I am getting close to retirement, and this would equate to about 5% of my total retirement funds of which my current calculations show I would need 5% a year to live my current lifestyle, so generally I don't think this would hurt my retirement ability and the build would not cost me more than I could sell my current home, and I would have no mortgage on the new place if I pay for the land outright.
It's been a while since I looked at loan rates.
My current home is at 2.25%. Yeah I know, but I hate my neighborhood and the land I want has no HOA and no building restrictions.
I realize removing ROTH money is not generally a good idea until you are in retirement mode, but I am getting close to retirement, and this would equate to about 5% of my total retirement funds of which my current calculations show I would need 5% a year to live my current lifestyle, so generally I don't think this would hurt my retirement ability and the build would not cost me more than I could sell my current home, and I would have no mortgage on the new place if I pay for the land outright.
It's been a while since I looked at loan rates.
My current home is at 2.25%. Yeah I know, but I hate my neighborhood and the land I want has no HOA and no building restrictions.
This post was edited on 5/28/24 at 4:30 pm
3
Posted on 2/1/24 at 3:30 pm to kywildcatfanone
Hey it's your money and if your not happy with your current situation and you have the means to do something about it do it. Are you over 59 1/2 so that you are not hit with the Roth IRA penalty?
Posted on 2/1/24 at 3:56 pm to kywildcatfanone
5% is a pretty aggressive withdrawal rate in retirement. Roth $ is best left untouched for tax free growth and so you can optimize taxes in retirement using Roth as tax free on top of other sources and to stay under income limits for benefit eligibility, tax brackets, SS taxation etc.
Do you have any cash or taxable investments you could use instead?
Do you have any cash or taxable investments you could use instead?
Posted on 2/1/24 at 4:19 pm to kywildcatfanone
I did it and regret it. Had to get the money just to survive at the time though.
If you decide to do it, make sure you have your numbers set up. It takes an insane amount to do a custom build. Financing isn't the same.
I'd sell, get into a rental, before ever taking $ out of retirement.
If you decide to do it, make sure you have your numbers set up. It takes an insane amount to do a custom build. Financing isn't the same.
I'd sell, get into a rental, before ever taking $ out of retirement.
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