Hey Adam! Yeah, I read some of this too about penalty free withdrawals… One other note I found is how the IRS defines “first time homebuyer” very loosely… “You are considered a first-timer if you (and your spouse, if you have one) haven’t owned a home at any point during the last two years“. Apparently!

My friend made that mistake recently too. It’s quite common actually, to fund an account and then not *invest* the money inside. We are all learning – even the experts!

Whether that makes sense, is a personal decision. But an interesting feature nonetheless.

Thank you. We have had them for several years and never invested them ourselves. I have learned so much through personal finance blogs.

Hey Chris! I can’t give you specific investment advice — but I can tell you what I am doing with my Roths!… My wife and I invest in a total stock market index fund. This gives us exposure to every publicly traded company, with very little management fees. Our return is exactly in line with what the overall market returns each year, which in the long run is good.

E-trade have a bunch of online resources to learn more about index funds, and their customer service team might have a financial advice arm to help you choose the best fund to invest in. Good luck and keep funding the Roths!

Hey David! The income limit is actually based on your MAGI, which is your AGI with some deductions added back in. Kind of a weird calculation, everyone’s situation is a little different.

If you’ve got a high income (and high savings rate), then you’ve already got a major headstart on the FIRE path anyway. Roths are awesome, but not being able to easily contribute to one is a good problem to have :)

Depending on your income levels this is a great approach!

Great to hear you’re thinking ahead. It will really pay off.

It’s easy to think of conversion ladders in equal amounts, in a straight line. But in reality each year brings different changes and opportunities for tax planning. Some years might be good for conversions, and others maybe just small bits of cap gains harvesting in your taxable account.

It just became so complicated that I haven’t funded a Roth IRA though I know I need to. I wish I got into the habit when I was in college when my income wasn’t that high anyway.