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I was on the "max out retirement accounts" train when I was younger. When I got older and home prices got massively inflated, I wished I kept more of that in non retirement accounts to be made more easily liquid for a home without steep penalties.

Saving tax while something grows is great, unless you need that cash sooner. Then it is not too helpful. I wish there were a tax advantaged vehicle to use for setting aside money for a home.

So yes, definitely invest in tax advantaged accounts, but do so with a solid understanding of your expected financial needs as best you can model for the next 5-10 years. If you need access to that money sooner, what you'd lose on tax may be worth the flexibility of having those investments somewhere more easily liquidated.

You can avoid the 10% tax penalty for early withdrawal for your first home if it's in a Roth IRA, up to $10k. It's not very tax advantaged though.

[1] https://www.irs.gov/publications/p590b/ch02.html

This is confused.

EVERY contribution you make to a Roth IRA/401k can be pulled out, tax-free, at any time for any reason. It's the earnings you have to be careful about. But for example if you have contributed $20k to your Roth IRA or Roth 401k, and it is now worth $35k, then you can pull out $20k at any time for any reason, while for the other $15k you have to wait until 59 1/2, or use SEP withdraws, etc.

In addition, for a first-time home purchase you can pull out up to $10k without penalty (but with normal income tax applied) from a traditional IRA or 401k.

$10k is well within the variance of fees and fluctuating interest rates on a home purchase. On the scale of real estate (in and around the cities that have significant tech employment) it's pocket change.

You can also loan yourself a bit of your 401k to buy a home. It's not a lot but at least helps https://smartasset.com/mortgage/when-to-leverage-a-401k-for-...

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