Define "first home"

[Guest Advncedtek]

We are looking into a ROTH IRA to possibly use for a house fund. I am looking for the definition of "first home". I realize that the definition can vary between different homebuyers programs but no one I have talked to has been able or willing to give me one for the ROTH IRA.

[BPickerCPA]

Neither one of you has owned a home (primary residence) for the past 2 years.

[John G]

The Roth is a spectacular tax shelter that has immense value over your lifetime. Think twice before using the assets for buying a home. You might find the cash for a down payment within your family for example. Grandparents are often complaining about CDs that yield 5% or less. Make them an offer that splits the interest gap. Delay purchasing for a year or two. Buy something smaller. Ask the owner to take a second. Etc. Be creative.

Before you use Roth assets, sit down with an HP12c calculator and run out your nest egg 30, 40, 50 years. Just because Congress gave you the option doesn't demonstrate that it is smart to take it.

And the same goes for 401K assets.

Keep your shelter intact and working for you. My viewpoint, based in part of my own short sightedness in 1980s when I took assets with a 10 year tax treatment instead of maintaining the tax shelter. I did not project far enough into the future to see my folly.