If you already have a Roth IRA, certain common behaviors — especially early withdrawals of contributions — can permanently reduce future tax-free retirement income.

In this video I explain how Roth IRA contribution withdrawals, skipped contribution years, and uninvested cash balances quietly damage long-term compounding and retirement tax flexibility.

This video walks through the real-world Roth IRA planning mistakes I regularly see inside actual retirement plans:

• Early withdrawal of Roth IRA contributions and the permanent loss of future tax-free growth

• Skipping annual Roth IRA contributions (lost contribution space cannot be recovered)

• Not investing Roth IRA contributions (cash drag)

• Using Roth IRA funds for a home purchase

• Prioritizing taxable brokerage investing before Roth IRA savings

• Backdoor Roth IRA conversions and the IRS pro-rata rule

• Contribution deadline misunderstandings

A Roth IRA is a tax-free growth account. Qualified withdrawals generally do not increase taxable income, do not cause Social Security benefits to become taxable, and often do not trigger Medicare IRMAA premium surcharges. Because annual contribution limits are capped, early withdrawals permanently reduce future tax-free retirement flexibility. Roth IRA contribution withdrawals are penalty-free but not consequence-free because lost contribution space cannot be restored in future years.

This video is especially relevant for:

– Pre-retirees (age 45–65)

– High savers using IRAs and brokerage accounts

– Anyone considering Roth conversions or backdoor Roth contributions

– Retirees managing Social Security taxation and Medicare premiums

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00:00 Roth IRA Mistakes Overview

01:11 The $65,000 Roth IRA Withdrawal Example

02:32 Why Roth IRA Withdrawals Are Different

03:30 Skipping Roth IRA Contributions

05:25 Roth IRA Contribution Deadline Rules

06:30 Forgetting to Invest Roth IRA Contributions

07:30 Using a Roth IRA for a Home Purchase

08:09 Why a Roth IRA Is Not an Emergency Fund

08:45 Taxable Brokerage vs Roth IRA Priority

09:35 Risky Investments Inside a Roth IRA

10:19 Backdoor Roth IRA and the Pro-Rata Rule

12:14 Multiple Roth IRA Accounts and Contribution Limits

[About] Colin Exelby is a Certified Financial Planner Professional™ or CFP®. He owns the virtual financial advisory practice Celestial Wealth Management.

I provide financial planning for business owners and their families that makes sense.

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DISCLOSURES

Celestial Wealth Management, LLC is registered as an investment adviser in the State of Maryland and Texas.

Neither the information nor any opinion constitutes an offer or an invitation to make an offer, to buy or sell any securities or other financial instruments.

This video is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person.

Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment and planning strategies discussed in this video and should understand that statements regarding future prospects may not be realized.

Nothing provided here constitutes tax advice. Individuals should seek the advice of their own tax advisor for specific information regarding tax consequences of investments.

Investments in securities entail risk and are not suitable for all investors. This is not a recommendation nor an offer to sell (or solicitation of an offer to buy) securities in the United States or in any other jurisdiction. All investment strategies have the potential for profit or loss.