Question: I have a traditional IRA that I would like to liquidate.

Can someone tell me what kind of penalties I would be paying? I have abt 16k in it. What would I end up with after getting out of it?

I want to use this money to buy a house as I’ve never owned a house before. I am aware of the new Roth IRA’s…. but don’t you have to keep the money in them for 5 years before it can be used for a first time home loan??

Also….. can Roth IRA money be used on a house that is _built NEW even tho it is a first time house for me?

Answer: Ahhh…. I didn’t know that!

Sounds like I should keep my traditional IRA intact if I plan on using it to buy a house then.

Would switching to the Roth actually penalize me on buying a house in that I would have to then wait 5 years BEFORE buying my first house?

Also…. will the Roth help me avoid paying taxes if withdrawn for a house vs the traditional IRA? You mentioned above that “you just avoid the 10% penalty” if I use my current IRA. Will the Roth avoid that completely?

Thanks for the help as I am trying to understand the diff between the two IRA’s.

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