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Can contributions to my Roth IRA be used tax-free if you are a first-time home buyer?

I'm getting ready to buy my first house and would like to use my contributions to my Roth IRA (they are equal to $11,200 over the last 10.5 years) for the home purchase. Can I take out the contributions tax-free and use them to purchase a home?

IRAs, Real Estate, Taxes
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February 2018

Contributions to a Roth IRA can always be withdrawn tax-free because you've already paid taxes on those funds. The earnings on contributions are what's taxed if withdrawn early. However, there is a special first-time homebuyer clause that states if the Roth has been open 5 years, and a withdrawal of 10k or less is made to purchase a home, then taxes can be avoided altogether on earnings. 

If you have other funding sources, you should consider using those instead. The long-term tax benefits of investing in a Roth IRA will likely outweigh the benefits from other funding sources. The tax-free compounding over long periods of time further elevates the Roth IRA as one of the best retirement tools, especially the earlier you start funding it. 

Best of luck on the new home!

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