My wife & I are 28 and plan on purchasing our first home in the next 1-3 years. Right now our assets are in two places:
- 403-b that I will not touch for the next 30+ years
- FDIC-insured savings account earning 1% interest
I have the option to start a Roth IRA account under a fund that offers a guaranteed 3% return. My understanding of Roth IRAs is limited, but I understand that first time home buyers can withdraw $10,000 ($20,000 joint) to purchase a new home. However, are there any restrictions to taking this money out? It's unclear to me if a 5-year "seasoning" period applies to first time homebuyers (ie. would we incur a 10% penalty for withdrawing up to $10,000 ($20,000 joint) on a Roth IRA that is less than 5 years old?)
Thanks for Alex B for suggesting that I migrate this question from here.