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Investing Tip of the Day
Example: At age 30, you invest $7500 in a Roth. During the year, it earns $1000. You can withdraw the $7500 any time with no tax or penalty. The $1000 can be withdrawn also, but you will have to pay a 10% penalty, or $100, plus potentially income tax on the gain. That is, unless you leave it in there until age 59 1/2. But at that point, you’re playing with house money that compounds tax free while in the account.
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