@MDM: I appreciate the link to the IRS document. Reading through it, I am just not finding where it addresses that early distributions can be done penalty-free. Admittedly, the language is dense and I am short on sleep, so I am sure I am missing something here. From the IRS publication:
What Are Qualified Distributions?
A qualified distribution is any payment or distribution from your Roth IRA that meets the following requirements.
1. It is made after the 5-year period beginning with the first taxable year for which a contribution was made to a Roth IRA set up for your benefit, and
2. The payment or distribution is:
Made on or after the date you reach age 59½,
Made because you are disabled (defined earlier),
Made to a beneficiary or to your estate after your death, or
One that meets the requirements listed under First home under Exceptions in chapter 1 (up to a $10,000 lifetime limit).
Our situation meets criterion 1 but not 2. What am I missing here?