If you are considering drawing any money from your Roth IRA to buy your first home, will you have to pay it back before retirement?
If you said NO.... you would be CORRECT
That's right, "Nothing has to be repaid" (my caveat here is "as of this writing"). But yes, All your contributions can come out of a Roth at any time for your "first home", tax and penalty free.
Special First Time Home Buyer Clause-- states that a first time home buyer can withdraw funds from a Roth IRA under the following conditions:
- the account has been open for 5 years
- you withdraw $10,000 or less to purchase a home
- the funds are used directly toward home acquisition (down payment, closing costs, etc.) (not for new furniture)
But what if you aren't a first time home buyer? What if you want to withdraw more than $10,000? You can still withdraw. One of the major perks of using a Roth IRA is that you've already paid income tax on your contributions.
So before you run out and say Karen said I can do this…. Please speak with your tax advisor and/or loan consultant first. Good luck and I hope this helps.
For more information on the Roth IRA Rules visit: http://www.rothira.com/roth-ira-rules
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