Emergency Early Withdrawal - Roth IRA

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swamp_penguin
Posts: 4
Joined: Sun Apr 25, 2021 1:34 pm

Emergency Early Withdrawal - Roth IRA

Post by swamp_penguin »

Hi all,

I am married filing jointly with total family income of $50K. My wife works full time and I am a full time student with no taxable income. We are in the 12% tax bracket. I am a two years away from getting my bachelor’s degree in Accounting and I fully expect to be in a higher tax bracket when I get close to retirement age. I am 30 years old so plenty of working years ahead of me.

I have recently became a first time father and some unexpected expenses came up. I have $27K in my Roth IRA account and $20K is original investment. My Vanguard is 60/40 VTSAX/VTIAX. I am, of course, not eligible for distributions but I am hoping to get guidance on withdrawing my money out, Say $15K out now. My daughter was born less than one year ago and I was wondering if there is a loophole where i can withdraw my money back out with no penalties.

Is it as simple as just calling Vanguard and getting them to send a check? I have deliberated with my wife for a month and we have decided that while this move has serious implications, we have rationally decided that it is the best move.

Thank you
sailaway
Posts: 8778
Joined: Fri May 12, 2017 1:11 pm

Re: Emergency Early Withdrawal - Roth IRA

Post by sailaway »

You can take out your contributions (I assume that is what you mean by original investment) at any time without penalty or taxes. I doubt you even need to call Vanguard, there is probably a distribution option online.
Normchad
Posts: 6117
Joined: Thu Mar 03, 2011 6:20 am

Re: Emergency Early Withdrawal - Roth IRA

Post by Normchad »

sailaway wrote: Tue Jul 09, 2024 12:59 pm You can take out your contributions (I assume that is what you mean by original investment) at any time without penalty or taxes. I doubt you even need to call Vanguard, there is probably a distribution option online.
Yep. No loophole needed.

This is why I always considered my Roth IRA to be a part of my emergency fund.
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retired@50
Posts: 13950
Joined: Tue Oct 01, 2019 2:36 pm
Location: Living in the U.S.A.

Re: Emergency Early Withdrawal - Roth IRA

Post by retired@50 »

See the distributions section of the wiki page on Roth IRA.

Link: https://www.bogleheads.org/wiki/Roth_IRA#Distributions

Regards,
"All of us would be better investors if we just made fewer decisions." - Daniel Kahneman
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