Cashing in Roth

[safari]

My kids have money in their Roths. If they need it for college, they may use it. Hopefully college will be funded from other sources, but the Roths are a back up. I prefer they leave it in, but who knows what they'll think as a grown up.

I would think taking money out as an 18 year old, they still have time to fund their retirement. (I also think it's never too early to save for retirement, which is why this money is there.)

How were you able to fund Roth IRA for your kids? Only people who had income from work can contribute money to an IRA account. Link

[disneysteve]

How were you able to fund Roth IRA for your kids?

Some kids work. Babysitting counts. That first job flipping burgers at McDonald's counts. Starting a lawn mowing business in your neighborhood counts. A paper route counts. Lots of ways for kids to earn money. What a lot of parents do is provide matching funds so the kid can start that Roth but still have money available to spend.

[moneybags]

How were you able to fund Roth IRA for your kids? Only people who had income from work can contribute money to an IRA account. Link

They modeled when they were younger (they are 11 & 14 now). Great way to start the college fund!

[cptacek]

I guess you need to run the numbers. Figure out how much you will lose in penalties by cashing out the Roth. If you are only withdrawing contributions, you likely won't lose anything. In that case, look at the overall retirement picture. If you have adequate retirement assets without the Roth (like a big 401k account or a solid pension), then perhaps you can be okay without the Roth assets. Personally, though, my Roth IS my retirement account so I can't imagine touching that for anything but retirement.

As a business owner, you have to play things a little different than employed people. How much will it cost you to move? Will you lose business? Will you lose time being open? Will you lose name recognition? If it will cost you more (long term) to keep the money in the Roth IRA than to cash it out for your business, then you need to cash it out.

[maat55]

As a business owner, you have to play things a little different than employed people. How much will it cost you to move? Will you lose business? Will you lose time being open? Will you lose name recognition? If it will cost you more (long term) to keep the money in the Roth IRA than to cash it out for your business, then you need to cash it out.

These are very important factors. I started this thread because I am in this situation. I have the money for the down payment, but was wondering what if? Moving a business is a big deal. I'd be the first to do it if it were the better option, but staying is, in this case.

I like most people think that your retirement fund is sacred, but am not sure in some cases.