Should You Use Your Roth IRA to Buy a House?
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The ROTH is great if you’re long equities in a bull market. How’s everyone’s ROTH doing with the major indices down 15%-30% ytd in mid July? I’ll wait…
Your lighting washes you guys out. You guys look like ghosts compared to other videos.
No, Roth is for retirement. Nothing else.
Greatest tip to financial-freedom; have a reliable side hustle. I made 25grands from mine.
The look of utter horror when Bo realized that lobsters sometimes scream when they’re boiled 2:53
Look at Bo starting at 2:51. Fear seen in his eyes from believing Brian's lobster story.
We bought our last home cash and was 25K short so we took it out of our Roth IRA. Saved a ton of money on mortgage initiation fees and interest. It was only 5% of our total retirement savings.
I am in a similar spot. I am thinking of using the max loan from my 401k for my first Home. House prices are around us are 720k in the low-mid tier if we drive 1 hour away (average is 950k without driving far away), in savings myself and my fiancé have around 25% of that plus 240k in my 401k and 55k in hers. I haven't seen anything anywhere where we can get for 3% down.
So they ended the discussion with saying that the difference at retirement is something like $500k (I don't remember the exact number), but they could have explained what $500k means in retirement. Assuming you pulled out 4% a year, that would be an additional $20k annual withdrawal, or $1667 a month.
Another way to look at it, $1.7M at 4% per year is $68k annually, giving a monthly average of $5667. Seems that additional $500k invested, or $1667 a month withdrawal, would really improve the overall monthly budget in retirement.
Any recommendations to someone who can’t afford the homes in their local market without putting down close to 20%? Curious if a Non-qualified mutual fund would provide a rate of return that’s worth the taxes you’d have to pay from any withdrawn gains used in a home purchase (or maybe just leave those gains in there either way). Of course this would also be for someone with a high risk tolerance.
Always love the shows. Keep up the great content!
Never touching Roth until full retirement
I bought a house with 20% down from ROTH contributions with intention to turn into a rental after a couple years. 50k down on 250k home 6 years ago. Been renting it for last 4 years, comp homes in neighborhood selling for mid 500s. Not including rent collected my equity is 5x my original down payment. I wouldn't make the same decision today (objectively real estate was cheap at the time) but I'd try to be pragmatic and thoughtful about how to use my investment dollars if I was short on capital and not totally dismiss accessing the ROTH.
The bad side to this is that house payment with 97% Due may just be too much for a lot of people!
I've heard you can use the IRA as part of the initial down payment and once you sell the home the total worth of the house becomes part of the IRA. Sounds like a bigger win
Get rekt Thane.
Definitely a no go in my opinion. If you can make more with an actual real estate investment then maybe.
Haven't watched it yet but I know the answer is no. You can only add $6k per year so you can't make up lost time
I thought the question was about Roth IRAs that allow you to fully purchase a home and the home is the property of the Roth IRA.
Im a Dietitian lol dont eat ramen hahahhahaha
In Canada we have RRSPs (similar to 401k) and the federal first time homebuyer plan allows you to use up to $35,000 from the RRSP as long as you pay it back to the account in 15 years. What would your recommendation be for that? I'm still saving plenty in my TFSA (ROTH IRA equivalent).
I’m 56 with about $48k in my Roth. When I turn 59.5, I plan on buying a sailboat using $ from my Roth and then using the remainder for the annual marina fees, insurance, and maintenance. I am currently maxing it out annually at $7k.
Where can you get a beer for $1??
I use the Roth to buy a new car every few years