Author Topic: Saving for a house - what to do with IRA?  (Read 846 times)

JJsfr

  • Stubble
  • **
  • Posts: 241
Saving for a house - what to do with IRA?
« on: January 03, 2017, 11:33:54 AM »
So my wife and I have decided to focus on building some cash for a down payment on a house, looking to buy anywhere in the next 20-32 months. 20% could put us in the $70-$80k range living in Denver right now. By the end of 12 months, I conservatively project we'll have ~$40k saved up in cash. Depending on our rent situation and whether it goes up dramatically at the end of our lease term (10/2018), I'd be OK with putting down 10% instead of 20%.

The question I have though comes down to what do we do with the 2017 IRA space? I'd hate to lose out on that space in the event we don't end up buying a house next year or even the year after. Maxing IRA's would obviously delay the availability of cash in a savings account. Because we're not maxing 401k's to increase cash savings, a tIRA is not an option. Some scenarios come to mind:

1) Ignore IRA's and forget about the $11k 2017 tax advantaged space.
2a) Max the IRA's, invest, and delay the accumulation of cash.
2b) Max the IRA's, invest, and liquidate whatever is needed from a taxable account with ~$90k [When I fund the IRAs? When we look to buy a house?]
3) Fund the IRA's to Max but don't invest the assets so I can pull them out with needed.

Typing this out, it's shaking out like 2b > 3 > 1 > 2a. I'd like to hear the community's thoughts on the matter.

FWIW, we have an approx NW of $222k, (~222k invested, ~$15k cash, ~$15k SL debt @ 3.2 %).


cchrissyy

  • Pencil Stache
  • ****
  • Posts: 703
  • Location: SF Bay Area
Re: Saving for a house - what to do with IRA?
« Reply #1 on: January 03, 2017, 11:40:00 AM »
I'd do either 2B or 3

it sounds like you may not be aware, but you can pull out the amount of your IRA contributions without penalty for a down payment.

JJsfr

  • Stubble
  • **
  • Posts: 241
Re: Saving for a house - what to do with IRA?
« Reply #2 on: January 03, 2017, 12:21:53 PM »
it sounds like you may not be aware, but you can pull out the amount of your IRA contributions without penalty for a down payment.

Thanks for explicitly stating that to remove confusion as I was hoping that was implied in option 3.