YNAB You Need A Budget

[Joel]

Where are you guys finding that there is no fee to withdraw contributions or that you can pull money from your IRA almost immediately, with no penalties of fees?

Google "72(t) Substantially Equivalent Periodic Payment".

That is very interesting. You have to pull a set amount that they determine for at least 5 years. But it is possible.

You can not pull whatever you want though on any whim, which is why I would still not include them. With YNAB, I will have no need to touch my retirement until I retire!

[DeguelloTex]

Yeah, it doesn't turn your IRA into a checking account or anything, but it's something I've looked at that might bridge the time between when my wife retires and when SS (if it's still around) kicks in.

I agree with your general principle, though. I don't include my investments in YNAB because I don't budget with them.

[smallLife]

Exceptions. You may not have to pay the 10% additional tax in the following situations.
You have reached age 59½.

You are disabled.

You are the beneficiary of a deceased IRA owner.

You use the distribution to pay certain qualified first-time homebuyer amounts.

The distributions are part of a series of substantially equal payments.

You have significant unreimbursed medical expenses.

You are paying medical insurance premiums after losing your job.

The distributions are not more than your qualified higher education expenses.

The distribution is due to an IRS levy of the qualified plan.

The distribution is a qualified reservist distribution.

A Roth IRA can be a PART of an emergency plan, especially against major unforeseen medical expenses. It's not a substitute for a cash emergency fund, but a statistically viable investment opportunity against the opportunity cost of keeping a large emergency fund in cash. Nor is it for those who reach into emergency funds for every little hiccup: but it IS an option.

[davraamides]

I have both term life insurance and permanent life insurance. I record term premiums as an expense (Mandatory Annual:Term Life Ins) and permanent premiums as savings (Savings:Permanent Life Ins). I don't track the cash value of the permanent policy in YNAB because I don't track any of my investments in it. But I delineate between an expense and a savings category because at the end of the year I want to see the total amounts I have captured in various forms of savings. I also have savings categories for Education (529 contributions), 401k and Emergency Fund.

[momo]

What are other users experience using variable universal life products? Thanks.

[JR5445]

Where are you guys finding that there is no fee to withdraw contributions or that you can pull money from your IRA almost immediately, with no penalties of fees?

Are we all talking about a Roth-IRA like I was originally discussing?

Just to clarify - smallLife is correct in that there are no taxes/penalties for withdrawing CONTRIBUTIONS from a Roth IRA --- only on the EARNINGS. This is why people use it for all kinds of things, like emergency fund or savings for kids college. This is also why it is an excellent tool for early retirees, because it can be leveraged prior to being qualified for 401K or traditional IRAs. You've already paid the taxes on the contributions and can take it out anytime -- you just have to meet the qualifications to withdraw earnings tax/penalty free.

The earlier post on "72(t) Substantially Equivalent Periodic Payment" is misleading in that it is not specific to withdrawal of contributions from a ROTH IRA plan.

**below is an example of advice related to ROTH IRA withdrawal - you will find all kinds of advice by search for ROTH IRA early withdrawal or something like that.

Order of Roth IRA Distributions

The IRS makes it easier for taxpayers to make penalty free withdrawals from their accounts by the way they assign the order of IRA withdrawals. Again, referring to IRS Publication 590, Roth IRA distributions occur in the following order:

1. Regular contributions.
2. Conversion and rollover contributions, on a first-in first-out basis.
3. Earnings on contributions.

As you can see, regular contributions are the first to be withdrawn, and they can be withdrawn at any time without taxes or penalties. The taxable portion of your withdrawals is held until the end, making it easier for you to make a penalty free withdrawal.