If I open an IRA with Wells Fargo, will I have to wait until retirement to use the money I put into it?

Question

please give me any advice or explain your own experience about opening an IRA?

Answer 1

The IRA's I have are left alone. I deposit money in them for retirement and then monitor the investments in case I need to rebalance.

I would recommend against investing in an IRA if you are looking to take the money out shortly.

A Roth IRA is a possible alternative though. If you need the money for educational expenses then you could take that money out penalty free.

The problem with the IRA (aka Traditional IRA) is that not only do you have to pay the 10% penalty but also any taxes. Not a very fun deal.

Some questions you might want to think about are:

1) Why am I opening an IRA?
2) Is there another way to invest my money so I can have access to it? (Maybe a Money Market fund would work better for you?)
3) Should I take advantage of a Roth IRA?

If you're looking to start investing for retirement the typical order is:

a) 401k to match
b) Roth IRA
c) Max out 401k

I've attached publication 590 from the IRS that explains IRA's and Roth IRA's.

HTH

Jesse

Answer 2

The short answer is: no, you don't have to wait. But you will have to pay a penalty for early withdrawal.

Jesse gives a very good detailed explanation. If you found all of that useful, give him the points. He is dead on target.

Question: Why Wells Fargo? I think there are better places to open an IRA (Fidelity, T Rowe Price and Vanguard come to mind).

Answer 3

No -- you can take the money out before retirement.

There are some age restrictions on taking the money out. If you take it out too soon, then you have to pay ordinary income taxes on the money you took out and also have to pay a 10% penalty. Since you would have had to pay taxes on that income if you didn't put it in -- it is just the penalty you need to think about.

This 10% penalty sounds like a lot -- but you could still be ahead if you had gains. For example, if you put 10K in the account and earned 20% on it, you would have 12K in the account. If you took it all out, you would still have 10,800 after paying the penalty.

If you had a 401K, you might be even better off, because your firm would have matched some of those funds.

Answer 4

yes 62 without penalty otherwise you wiill pay a penalty .apercentage of whateveryou have at the moemt you try to withdrawn your money

Answer 5

No.

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Answer 6

Unless you want to pay taxes and penalties, yes!