I have to pay $15,000 for my roof. Is it better to withdraw the funds from my Roth IRA, 401(k), IRA, or my money market account?

Choosing the Best Account for a $15,000 Roof Replacement

“I have four retirement accounts I could use to cover the cost.” (Photo for illustrative purposes.) - Getty Images/iStockphoto

Reader's Question

I need to replace my roof, and the repair is estimated to cost $15,000.

To cover this expense, I have access to four different retirement accounts:

• A Roth IRA with a balance of $16,000
• A money-market account holding $16,000
• A traditional IRA valued at $460,000
• A 401(k) with $43,000

I am 61 years old, single, and currently employed. Which account would be the best source for this withdrawal?

Signed, Fixer Upper

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Expert Response

Dear Fixer Upper,

Even if your roof isn’t leaking yet, this is the kind of unexpected expense that emergency funds are meant for.

Your money-market account, which combines features of a high-yield savings and checking account, is designed for situations like this. Withdrawals from this account are generally penalty-free, though you may owe taxes on any interest earned. Using these funds allows you to address the repair without tapping into your retirement savings.

If you were to withdraw from your traditional IRA or 401(k), not only would you lose out on future investment growth, but you’d also owe income tax on the withdrawal. This means you’d need to take out more than $15,000 to cover the cost after taxes. While Roth IRA withdrawals aren’t taxed, you’d still lose the benefit of tax-free compounding.

Taking a large sum from your traditional IRA could also push you into a higher tax bracket, making the repair even more expensive. The simplest and most cost-effective solution is to use your money-market account, then gradually rebuild your emergency savings afterward.

In summary: Using your money-market account is the most straightforward and financially prudent way to pay for your roof replacement. This approach avoids penalties and unnecessary taxes, preserves your retirement savings—especially the tax-free growth in your Roth IRA—and puts your emergency fund to its intended use.

Considerations for Your Retirement Portfolio

Your investment portfolio is heavily weighted toward tax-deferred accounts, with nearly 95% in your traditional IRA and 401(k). While this is common for someone your age, it does mean you’ll face significant taxable income when you begin required minimum distributions (RMDs).

Your Roth IRA makes up only about 3% of your total savings, limiting your tax-free growth potential. Going forward, you might want to increase contributions to your Roth accounts or consider Roth conversions if your situation allows. However, after paying for the roof, your emergency fund will be quite limited, so be cautious about other unexpected expenses.

Planning for the Future

You still have time to strategize about taxes and conversions before you retire. Under Secure Act 2.0, you won’t need to take your first RMD until age 75. These rules apply to traditional IRAs and 401(k)s, but not to Roth IRAs funded with after-tax dollars. At age 75, your RMD will be calculated as your account balance divided by 24.6, or about 4.07% of your tax-deferred savings.

Since most of your assets are in retirement accounts, withdrawals will be taxed as ordinary income. Increasing your allocation to fixed-income investments can help stabilize your portfolio as you transition from saving to spending in retirement.

There are still some unknowns, such as your mortgage status, interest rates, other debts, income, and projected retirement expenses. You’ll also need to decide when to start claiming Social Security benefits.

Social Security calculates your benefit based on your 35 highest-earning years. For 2026, the maximum taxable earnings are $184,500. The highest possible monthly benefit in 2025 is $5,251 for those who wait until age 70 to claim.

If you keep working, you’re in a strong position. You might consider part-time work as you approach retirement, which can provide structure, maintain social connections, and help you transition smoothly.

Keep in mind that your Social Security benefits will be taxable based on your other income. If you take on part-time work or draw from retirement accounts, consult a tax professional. Delaying Social Security until age 70 increases your benefit, but could also push you into a higher tax bracket depending on your other income.

Best of luck with your roof project—and congratulations on your careful planning!

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