epimedium wrote:I was wondering if anyone here has tapped their Roth IRA for an emergency use. As I understand it, you can withdraw contributions penalty free and you would complete IRS Form 8606 Part III. We have 6 months expenses in a taxable emergency fund but lack additional funds to contribute to a Roth IRA this year (we are maxing out both 403b and 457 to save $70000!). It seems like a no-brainer to contribute to the Roth from the emergency fund and allocate the contribution to a short term bond fund to preserve the Roth space for the future (and to earn pitiful interest tax free). There would still be plenty of additional funds remaining in an FDIC insured savings account. As for Roth vs 403b/457, we prioritize those since we are in a high tax state (NY) and plan to retire to a low/no tax state (NH). Thanks.
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