Vanguard Roth IRA - Question

[bcoop]

As you should. I just want to clarify that I'm taking my position b/c there's lots of evidence in your initial post that says you're averse to taking money out of that emergency fund, as I would be too. I value the liquidity and a "safety net" and I wouldn't forego that to save $10-$20. I agree that fees suck and should be avoided, just taking the scenario as a whole I don't think I'd dip into the emergency fund.

Understood, and yes, taking any money out of that account for any reason at all scares me. Scares me a little more to take money out of that, and put it somewhere less accessible. Also scares me that I wont have enough to retire due to a late start on contributions. (Started at 29 or 30 iirc). I have to find a middle I'm comfortable with, and that's what I'm trying to work out.

[Fordblue625]

Understood, and yes, taking any money out of that account for any reason at all scares me. Scares me a little more to take money out of that, and put it somewhere less accessible. Also scares me that I wont have enough to retire due to a late start on contributions. (Started at 29 or 30 iirc). I have to find a middle I'm comfortable with, and that's what I'm trying to work out.

In the Roth your contributions (not earnings) can be withdrawn penalty and tax free. The 5 year aging does not come into play for your contribution amount. You can contribute to the Roth but leave it in cash for now. You could consider this part of your emergency fund for the time being. When you have built the emergency fund back to a sufficient amount at the bank, you can then invest the cash in the Roth into something more appropriate. You can use it if you had to, but if you don't need it then it will already be in a tax sheltered environment ready to grow for retirement. Jody is 100% right on liquidity and fees. If you don't have a sufficient emergency fund built, don't invest the funds.