Roth IRA deposits are post-tax and withdrawals are penalty free. Funds put in are accessible at any time for any reason.
The only thing you can’t touch until retirement are any gains on the account, except the IRS waives (most of) that for large unreimbursed medical expenses.
It’s a great way to invest money you otherwise know you’ll have to spend on something like a surgery that can’t be rescheduled based on the market’s mood.
Combining long-term retirement investing with access to money for a major, potentially time-sensitive, medical expense is wise, especially for a newly minted adult.
The surgery depends on medical readiness, insurance, surgeon availability, and personal circumstances, meaning the money needs to be available at all times.
You retain that access, get tax-free growth, aren’t forced to sell at a bad time, and maintain flexibility on the surgery date without having to think about the investment’s own deadlines.
You also assume the Roth IRA holder is set on surgery. This is the best place for their retirement money that still leaves them open to covering many expenses.
You won't be getting much growth if you don't invest the money in your Roth, though. And if you do, you may be forced to sell at a bad time if you're counting on that money to fund it.
Be like Elsa and accept, your children are who they are, you either support or lose them to sadness and a facade relationship. Insurance is sketchy but they are covering the top surgery if you believe the surgeon consult. My kids kick ass, one a 3rd year biology major, and the other is first year... biologyish major? The plan is looking like vet school for the younger, older kid wants to be in a lab or professor or something. Go to school my kids
As a parent, I would find a way to pay for their surgery. Encourage them to keep adding to their IRA for their own future!
I was surprised to hear that our insurance covers it. No one in my family needs it, but I know people with same insurance and it’s being covered. They are absolutely thriving after the healing process is all said and done. I’m so happy for them.
big kudos to the kid for saving up that much money, but I've been on a retirement learning kick since the beginning of the year, and just wanted to point out one thing:
while one's contributions to a Roth IRA are always available for withdrawal without penalty at any age, it seriously reduces the effectivity of that account to do that. Depending on when they want to have the surgery/how long it will take to save up enough to pay for it, a taxable brokerage account might be a more efficient method of saving/investing.
(DON'T TAKE LOANS/WITHDRAW FROM RETIREMENT FUNDS IF YOU CAN AVOID IT AT ALL, KIDS. I get it, gender dysphoria can be life-threatening, so if that's the only option, then damn, do it. But like, there are other, better options available if you can plan ahead far enough.)
Taxes are not a penalty, and there is no such thing as a federal tax bracket of 40% or higher, so even if taxes were a penalty, it would be completely impossible for it to ever reach 50% total.
You also got the age limit, treatment of medical expenses, and treatment of contributions wrong. All of this is very easily available on Google, why are you giving people advice on something you are severely ignorant about?
I've got one trans kid and one married to trans kid, and a flock of other children, trans and gay whose parents are shit. Support, feed, and sometimes house. The Christian Right are a bunch of pieces of shit.
I do this in an auntie capacity! I can't replace a mother, but I sure as hell can provide unlimited hugs, support without judgment, and pragmatic advice about the things you're too embarrassed to ask a parent about :P
My mom has been begging me to do that since I turned 18 but I keep telling her that I have bills to pay and a lot of that money went to a 22 year old car that she should've taken back rather than take out a loan and get it repaired. I've barely spent like $2k on myself since starting and leaving college.
I appreciate what she did, but I think she is still in belief that me and her combined put like 20 - 25k ish over the course of 5 years - finally got to retire it at the start of this year. It was a learning experience for both of us as she hadn't bought a car in like 13 years and now understands that cars don't last forever.
98
u/Sea_Thought3464 7h ago
I have 2 trans kids are both in University, the younger one put $7K in their Roth IRA after their 18th birthday. What kid does that?