#94 - Should You Withdraw Contributions Made To Your IRA Account?
Hey everyone, Kirk here again and welcome back to the daily call. On today’s call, we’re answering the question from the community and the question was – “Should you withdraw contributions made to your IRA account?” First and obviously, please talk to your CPA about this and not use this as the only basis for doing this. But in most cases, I think the rules now are you have to have an IRA for five years and then you can obviously withdraw contributions. In most cases, I’m talking about ROTH IRAs where you have after tax contributions, so you’ve already paid tax on it. You can take those contributions out. You just can’t take out any of the gains that you have. But obviously, you might have to put them back or they might be subject to putting those distributions back into your account at some point in the future. Again, consult with your CPA on this. But as a general rule of thumb, I would say don't take money from your IRA unless you absolutely need to. There's probably a million reasons why you shouldn't do that, but I think the biggest thing for me is that if you've put money into an IRA retirement account, etcetera, it's basically in the best possible scenario to grow tax-free or at least pre-tax I guess if you’re doing it in a 401K or in a ROTH. But it’s in the best possible scenario to grow and not pay capital gains tax and not pay taxes on it for income, self-employment income, etcetera, if you take it as distributions and income. It’s really, really setup to do very well. I think you need to protect your IRAs as much as possible. If you need cash from it, obviously you can take it, but it's probably not recommended. I definitely don’t recommend taking money from your IRA for the sake of building out a margin account. I think that you can basically trade an IRA account just the same generally that you could trade a margin account. There might be little tweaks to how you trade the strategies and doing things risk-defined versus undefined risk, but ultimately, you need to keep money in your IRAs and in any retirement vehicles that you have that are tax-favored because you want those to grow with the best tax advantage as possible. This was a quick one today, but as always, if you guys have other questions, please let us know. Head on over to optionalpha.com/ask. You can shoot me a message there, leave a voicemail. You can leave a message or a comment on Twitter, on Facebook, on Instagram. Let us know because as always, we are trying to get as many show scheduled out into the future as possible and questions like this always help out because we want to make sure we’re answering the questions that you guys have in the community. As always, happy trading and happy investing!
