Roth IRA Consolidation?

[Eric Geers]

My wife and I were only able to invest a little less than $10,000 in our respective Roth IRAs before our combined income disqualified us from contributing anymore. My question is this:  Should we leave the money in our Roth IRAs, or consolidate the money (+/- $17,000) into our individual brokerage account? Consolidating the money in our brokerage account would just add to our ability to take advantage of other investment opportunities in the next 1-2 years. Not a critical life decision, but I'm curious what others would do. Thanks!

[Ben Zimmerman]

Quote from @Eric Geers:

before our combined income disqualified us from contributing anymore. 

There is no such thing as earning too much money for a Roth IRA if you use the Backdoor Roth, or Mega-Backdoor Roth IRA. Essentially all you need to do is open a traditional IRA with the same company you have your Roth. Put money into the traditional IRA, wait one day, and then do a rollover conversion transferring the money from the traditional directly into the roth. You can perform a rollover once per 365 days

Otherwise, if you feel the need to withdraw the money for potential use in real estate, remember that you can withdraw your contributions at any time tax and penalty free from a Roth IRA, however any EARNINGS you may have accumulated do get taxed and penalized if you try to withdraw them. So you could withdraw the roughly 10k anytime, but if you try to touch the other 7k you get slapped with penalties.

There is no right or wrong answer, but I like having funds in a retirement account growing tax free and shielded from creditors. The account also makes a pretty decent last ditch emergency fund. I invest my Roth funds into REITS such as AVB, EQR, O, and others. This is due to the way REIT dividends are taxed as ordinary income as opposed to capital gains, this makes them a prime consideration for a Roth account and will almost guaranteed significantly outperform the broad S&P500 over an investors lifecycle.