As I read it in this publication - it appears that you can withdraw your principle before the five year wait period so long as the money is going to higher education expenses. Have I got that right? So say I put in $6500 in 2013, 2014 and 2015. Now May 2015 rolls around and junior’s been accepted to college and the account has a value of $21,000 (19,000 in contributions and it’s earned $2,000). I should be able to at the very least withdraw $19,000 without penalty and pay the university down payment. Please let me know if I’ve missed anything. Thanks!
You have not missed anything. Contributions can be withdrawn without penalty. Only the earnings would be taxed, and they would not be penalized if they are used for higher education.
The one thing to remember is that you can’t borrow for retirement, whereas education can be funded with loans to be repaid. Be sure you have enough time and money to be comfortable in old age so you aren’t a burden.
Good luck!
Two comments:
3 x $6500 = $19500
I believe that ROTH distributions are considered untaxed income for FAFSA purposes.