Cashing Out
When you contribute money to a Roth IRA, that money is not tax-deferred. That is hugely advantageous for those worried about their tax brackets when they retire, as cashing out is tax-free.
However, there are certain things from stopping you from withdrawing the money too early, so don’t ever consider using your Roth IRA as an emergency fund. Namely, you can only avoid taxes and penalties if your account is at least 5 years old and if you start withdrawing after the age of 59.5.
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