Episode Details

While a Roth IRA is one of the best ways to save for retirement, it can also be used to save for college.

A Roth IRA is one of the best ways to invest for retirement, since the money inside it grows tax-free and in most cases, withdrawals for retirement come without any tax consequences. It can be an especially great way to save for retirement when you're young and your income is relatively low. If you're in a low tax bracket, getting a tax deduction (like for 401(k) or Traditional IRA contributions) won't benefit you nearly as much.

But while the primary use of a Roth IRA is for retirement, there are a couple of other ways that you can withdraw money from your Roth IRA without paying a penalty.

One of those is for qualified higher education expenses. That makes using a Roth IRA to save for college one option to consider.