Thanks meldy! I do have many places. I had this guy who has been working with my dear friend, who lost her husband very suddenly last year, helping me. I've been to the SSI retirement symposium so that I could hear what I might need to tell mom who is just about to retire (age 70 next year), and what I might start doing to position myself. I saw him in action there; he was giving the right advice. "Don't take Medicare until as late as possible", if nothing else, but there was more, and he was right on. I've been teaching my son that too, showing him how compound interest was the most important part, so much so, that he could invest X, by age X, and if it averaged X, then he'd have millions by the time he retired (way earlier than 65), even if he quit at a certain point... that he wanted to start now and doesn't plan to quit investing in it. He started his retirement nest egg at age 8 (three years ago), and will put it into his first CD by the mid-year next year ($1,000 minimum), which is pretty good because he started out with getting only $15 a month for everything he does, and although it's up to $45, that's all he ever get. Anything else, he'll have to work a job (to pay for a car, gas, insurance, designer clothes, etc.). He's never taken anything out of the retirement fund because he has another savings that he takes from when he wants the "big" things and already has spending money set aside. I think he'll do it. As long as some wretch doesn't get her hands on it later on. It has been fast because we knew how to pare down, set aside exactly what was needed for the bare bills, save as much as possible, and some small amount is now being added as investment. Some time next year, they'll get switched. The bigger savings will be all investment fund with a bit going into CDs. And I'll go back to my own personal having-fun-with-the-stock-market investing. I can make big bucks with that, even when the market is down. And God is good. That too. Moreso, because of that. :)

---""Personally, I dont think it is smart financial planning to have your entire life savings in your retirement account." Why not?"" I'd like to clarify the above response. The only exception that I can think of is an emergency account.--- Assuming you are funding your retirement account appropriately to provide adequate retirement income, why would you put additional savings into retirement accounts? Once there, you can't use them easily and without penalty until you are retirement age. No, tax savings from tax-deferred accounts are not inconsequential, but neither is the freedom that comes with having money available to use how when for what you want. I am putting money into a combination of 401k and Roth retirement accounts at a rate which will conservatively provide me with adequate retirement income. This is less than the max--(although well over employer-match). Every thing else goes into ordinary ol' non-tax-deferred investment accounts. It's not really "emergency" money--- i also have 6-month living expense emergency funds in my bank account. But I am in my 30s. Why would I put any money above and beyond what I will need for retirement somewhere that I can't easily reach it for the next 15-20 years? Maybe I'll want to go to grad school and want to use it for tuition. Maybe I'll get married and want to put my husband through school. Or my husband's kids. Maybe I'll want to buy a bigger more expensive house and want to use it for down payment. Or a second vacation and/or investment home. I might want to take a year off work and travel. I might want to take a year off work and be a mommy to a new baby. I might not *want* to take a year off work but be forced to when I'm fired from my current job and it takes me a year to find a new one. I might want start-up money for my own business. I might have a sudden desire for one of those convertible Mercedes two-seaters (is it the SL i think).... I might I might I might. Freedom (and security) is "why not?" (which are the same reasons btw that I'm saving it in the first place rather than simply spending everything above and beyond what I've decided I need to save for retirement)

No one can answer this without way more detailed data. You need to share: -What your AGI was last year -Your total tax bill last year -How much tax was witheld last year -How much you owe the IRS from the difference between the 2 above -What penalties and interest they are charging you (including details on when more penalties are being added) -What sort of payments you are making now, and what you are able to make if you squeeze your budget a little more. -What your income is projected to be this year -How big your retirement nest egg is, and in what form (401k, IRA, Roth, etc.) -How old your husband is If you care to open your kimono and share all that, we might be able to provide you a little more educated guess, but the mathematical answer depends on your info above. For example, if you owe $10,000 and your income is $100,000 the answer is probably "just tighten your belt and pay it off in a few months." If you owe $100,000 and your income is $10,000, then you might have no other options than your retirement nest egg, regardless of how big it is. But all the other stuff factors in as well, like how fast the penalties and interest are piling up and what tax bracket you're in now.

A basic principle of taxation in the USA is every dollar is taxed once and only once. (Qualifying Roth IRA withdrawals can be an exception.) Your contributions to the Roth IRA should not be taxed again by the IRS because you already paid taxes on those contributions when you put them into the Roth IRA. The earnings on the Roth IRA may or may not be taxable depending on your circumstances. For example, how old are you, how long were the funds in the IRA, were there any circumstances that existed in your life that would qualify you for an exception to the 10% penalty for early withdrawal? Page 58 of the pub linked to below should help you answer your questions. In my 12 years of preparing taxes, one of my favorite things to do is prove the IRS wrong when they assess additional taxes. Good luck. Here is a link that might be useful: IRS Pub 590