Finance Quick Answers
I recently started a new job and would like to roll over my retirement plan to an IRA. I am debating on whether to buy a Roth IRA or a traditional IRA. I would like flexibility of making withdrawals for college or a home in the future.
Both traditional and Roth IRA’s allow you to make penalty-free withdrawals for education. Withdrawals for education may not be the best idea. You will miss out on further deferral and the added income can make it harder to qualify for financial assistance. You can also make withdrawals from your Roth IRA for a first time home purchase as well as for death and disability. You should ask the financial institution to offer a comparison of the two IRA’s prior to your purchase.
Source: Talking Dollars Makes Sense, Patrice Dollar-Johnson, Consumer and Family Economics Specialist, Fall 1998.
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Monday, July 28, 2008