Use Your Roth IRA to Buy Your First House


I’m not a fan of retirement, so I don’t usually think a ton about my Roth IRA. It’s not a worthy goal for an ambitious person. Unless retirement means you don’t have to work so you can focus on ambitious (albeit sometimes unprofitable) goals—in which case, hell, I’m retired right now.

Nevertheless, the Roth IRA is a lowkey solid tool to the initiated. It’s not merely a way to squirrel away funds for retirement which you can withdraw tax-free years from now. Under specific circumstances, you can use it today.

Legally Withdraw Roth IRA Funds Early

When you contribute to a Roth, you are paying taxes on whatever you put into it. It’s only tax-free when you pull it out. Most people don’t know you can pull out your initial investment into it whenever. It doesn’t have to be at retirement.

What you can’t do is pull out any gains your investment made, or else you risk penalties for early withdrawal.

However, you are permitted to withdraw as much as you want—even the gains—if you’re using it to buy a house as a first-time homebuyer.

Requirements for Early Withdrawal

  • You need to have opened and contributed to your Roth at least five years ago
  • You have to be using your distribution as a first-time home buyer
  • First-time home buyer doesn’t just mean you’ve literally never bought a home before—just that you haven’t owned a home in at least 3 years.


  • You can pull out up to $10,000 in earnings from your Roth penalty-free
  • Combine this with your ability to take out contributions anytime. If you have a lot stored in your Roth, you now have access to a meaningful piggybank.

My Take: Roth IRA

I don’t think retirement accounts are the best way to get rich—unless you’re Peter Thiel. I also don’t unnecessarily pay taxes. Therefore, if you have money in a Roth, don’t take it out and incur an unnecessary penalty. Instead, creatively deploy it towards something you can turn into an asset today.

Use those funds to help you buy a house.

If you want to really make this deal worth it, turn your house into a rental property (you need to live there, too) and use an FHA loan to make your money go as far as possible.

With the combination of Roth funds, an FHA qualification, and buying a property which you rent out a portion of, you could go from “I have money tied up in my retirement” to an income-generating asset in no time at all.

Consult a lawyer, tax accountant, etc. This is not financial advice. But hopefully, it’s enough to get started!

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