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I just got done reading a post from MyMoneyBlog that asked if you could really withdrawl from your ROTH. My first reaction was, sure, good idea! It’s a good investment vehicle that can draw good returns on good investments. Why not! But then I got to thinking I could invest that money elsewhere, after-tax in generally the same funds in the same way.

People seemed to morph the conversation into using the ROTH as an Emergency fund vehicle and skipping that step in the all important 10-step program of where you want to put your funds; primarily #1 for some folks (including me) which is to fund 2-6 months of immediate liquid funds in a high yield savings or MMA. MUCH better idea I think.

Your ROTH IRA should be specifically for that. Retirement. Taking funds out prematurely may be possible tax-wise, but retirement-wise it could be the dagger in your portfolio! Taking $ out of there is going to kill the gains you’re making on that money over the life of your investment. I highly recommend keeping both entities separate. Keep a E-fund AND a ROTH IRA. You’ll thank me when you turn 59 1/2…

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