Saving for a Roth IRA – Pro’s and Con’s – Anyone can do this, you can do it online for free – it’s not as complicated as you think
Pro’s
- Can contribute up to $6000 every year
- You CAN withdraw initial contributions
- You can use your Roth IRA money to buy a home
- If you expect to make more money in future, this could make a lot of sense – pay taxes now, while you’re in a lower tax bracket, invest the money and put it in a Roth IRA, pretend like it doesn’t exist and once compounds over time get that money completely tax free
- Keep in mind, It’s very likely taxes are going to increase over time, especially considering the U.S. gov in mountains of debt
Cons
- You’ve technically already paid taxes on whatever you put in – (from your paycheck) (There is no free lunch)
- There is a 10% penalty for withdraws on gains made before the age of 59.5
- There ARE income qualification limits
- https://www.investopedia.com/articles/personal-finance/110415/can-you-use-your-ira-buy-house.asp
- https://www.schwab.com/ira/roth-ira/contribution-limits