use trad or roth or both to purchase a home as primary residence.
Example;
Having funds in both trad & roth iras.
all irs requirements met to withdraw without penalties from either account.
home purchase exceeds the amount in the trad ira, but not the roth.
living income has come from the trad ira.
Question; purchase home using funds only in the roth, or a combination from both?
either way there are enough funds to live from roth in any combination.
Permalink Submitted by Alan - IRA critic on Wed, 2025-06-04 15:15
If no penalty, the person must be over 59.5. But because taxes will be due if the distributions are taken from the TIRA and not the Roth IRA, the marginal rate in the current year should be compared with the expected marginal rate in retirement for TIRA distributions. If the retirement rate will be lower, the Roth should be the primary source of funding the purchase, but if expected retirement rate will be higher the TIRA should be used.
If the amount needed is substantial, a mixture of the two accounts could be used, eg use the TIRA up to the top of the current bracket, and any additional needs from the Roth IRA.