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So, you are correct about the contributions. The earnings are still subject to tax and penalty until you are 59.5, unless you use up to $10K for purchase of a first home.
Location: Chapel Hill, NC, formerly NoVA and Phila
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Yes, you can take out your contributions any time for any reason (the $5000), so why not put it in the Roth, and should you later decide to add it to your mortgage, you can. You don't want to put all of your money into the house and not have any liquid assets. This will allow you to have some.
Yes, you can take out your contributions any time for any reason (the $5000), so why not put it in the Roth, and should you later decide to add it to your mortgage, you can. You don't want to put all of your money into the house and not have any liquid assets. This will allow you to have some.
I realize that...but I work for the state, have secured tenure and am part of a large union. Although anything can happen, I can't imagine having a more secure job. Even though I am a worrier and spend quite a bit of time in that mindset about most everything, I have to be realistic too. We've continued to have our normal (small) pay raises, full continuations of benefits like travel $ and sabbaticals granted.
Wow! That isn't the story where I work at all. Your state must be financially healthier than California, where I live. I work for a city government and we took 12% pay cuts this year and still had layoffs. They laid off police, & firefighters, who were previoustly treated as sacred cows as far as budget cuts and pay cuts were concerned. The poiice have now taken pay cuts 2 years in a row, but still had layoffs this year.
I know people who work for the State of CA. The state doesn't seem to be laying off as much (although they have done some of that), but it is getting rid of people by attrition and pay raises are not forthcoming. The state has the ability to steal revenues & withold payments to the local governments, though. That game is going to end soon and then they will have to get really serious.
So, in short, even if your state is better off financially than CA, I would expect it to get worse before it gets better.
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