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Roth IRA withdrawals could fund home renovations, but may raise retirement risk
The approach can offer tax-free renovation spending, but it may leave high earners without enough retirement income for unexpected costs.
Yahoo Finance discusses whether it makes sense to use Roth IRA funds to pay for home renovations after age 65, noting the decision depends on a household's income, assets, and tax strategy.
The article says Roth IRA withdrawals can be a way to support renovations with effectively tax-free spending, since withdrawn dollars are not reduced by set-aside taxes the way earned income can be.
It also warns that withdrawing retirement savings can be costly over the long run if the household is not otherwise prepared for retirement needs, especially if the remaining accounts would not cover in-retirement expenses.
Yahoo Finance advises that if retirement accounts can still meet projected needs even after paying for renovations, the move may be more reasonable, but if spending creates gaps, it could hinder the ability to handle unexpected expenses later.