I’d say that’s what savings are for - spend the $80k savings (minus an emergency fund), and sell taxable investments to cover the rest. It’s hard to get money back into the Roth is the reason to do it this way. If you’re worried about not having any savings think of it this way: you can always take principle out of your Roth if you end up needing money before you replenish your savings.
Agree. OP can also put a HELOC in place to tap for any short-term one time expense gaps while they are rebuilding their emergency fund. Tapping Roth would be my last resort when out of other options.
Money in a Roth IRA is the most valuable money you have: you never have to pay taxes on the growth if you hold to retirement. Pull from your Taxable account first. Yes, you'll have to pay some capital gains tax, but that is better than giving up tax free growth.
Depends on the time to retirement how much it will affect your eventual amount. Over total investment it isn't much(about 1%) but it is about 1/3 of your Roth IRA.
Consider interest rate in light of how the account is performing. Some funds can be getting 10-20% returns over the last few years.
Assuming your post-tax investments are held long-term, I would absolutely sell those before cashing in the Roth. You're going to have to pay a 15% tax on those whether you pull them out now, or wait till you retire. I'm pretty sure the only way you'd avoid paying a tax on those is if you die and your heirs get a stepped up basis for the value of them based on when you die.
Seems reasonable to me.
I think taxes probably won't impact you. Ie your house is "cheap" enough you'll probably take the standard deduction. If you planned to itemize mortgage interest that could impact you a little.
Do you have any kids / other expenses to consider.
I’d say that’s what savings are for - spend the $80k savings (minus an emergency fund), and sell taxable investments to cover the rest. It’s hard to get money back into the Roth is the reason to do it this way. If you’re worried about not having any savings think of it this way: you can always take principle out of your Roth if you end up needing money before you replenish your savings.
Agree. OP can also put a HELOC in place to tap for any short-term one time expense gaps while they are rebuilding their emergency fund. Tapping Roth would be my last resort when out of other options.
Money in a Roth IRA is the most valuable money you have: you never have to pay taxes on the growth if you hold to retirement. Pull from your Taxable account first. Yes, you'll have to pay some capital gains tax, but that is better than giving up tax free growth.
Depends on the time to retirement how much it will affect your eventual amount. Over total investment it isn't much(about 1%) but it is about 1/3 of your Roth IRA. Consider interest rate in light of how the account is performing. Some funds can be getting 10-20% returns over the last few years.
Assuming your post-tax investments are held long-term, I would absolutely sell those before cashing in the Roth. You're going to have to pay a 15% tax on those whether you pull them out now, or wait till you retire. I'm pretty sure the only way you'd avoid paying a tax on those is if you die and your heirs get a stepped up basis for the value of them based on when you die.
Probably an unpopular opinion, but I'd pull it and use it. If nothing else its a hedge for market risk.
Do not borrow from your retirement. Use some of your taxable and your savings.
Seems reasonable to me. I think taxes probably won't impact you. Ie your house is "cheap" enough you'll probably take the standard deduction. If you planned to itemize mortgage interest that could impact you a little. Do you have any kids / other expenses to consider.