Personal Finance

3738 readers

2 users here now

Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!

Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)

founded 1 year ago

MODERATORS

[email protected]

If I start a Roth IRA in a couple weeks, and keep contributing $7k per year to it, for years & decades, When will it pay off? When can it be money for me to spend? (lemmy.world)

submitted 10 months ago* (last edited 10 months ago) by [email protected] to c/[email protected]

5 comments fedilink hide all child comments

And does it multiply while it's invested in the Roth IRA?

all 6 comments

sorted by: hot top controversial new old

[–] [email protected] 12 points 10 months ago (1 children)

Overview is here https://www.irs.gov/retirement-plans/roth-iras , but generally 59 and 1/2 is when you can start taking distributions without penalty.

[–] [email protected] 4 points 10 months ago

59.5 years old. Got it.

[–] [email protected] 11 points 10 months ago (1 children)

Money in an IRA doesn't automatically "multiply" as you say. You'd need to invest your contributions into something, like a stock or mutual fund

[–] [email protected] 8 points 10 months ago (1 children)

You can take the principle out without penalty. Profits need to wait until 59 1/2 to be penalty free.

https://www.your-roth-ira.com/withdrawing-roth-ira-principal.html

[–] [email protected] 6 points 10 months ago

As a note, you can't "borrow" from a roth. So if you withdraw principle, you're limited by the max contribution rate in building up the principle again.

So while it's penalty free, there are limitations to keep in mind.