Can I use my Roth IRA to start a business?
Read the Forbes article titled IRA Adventures. While it's not the detailed regulations you certainly need, the article gives some great detail and caution. You may be able to do what you wish, but it must be structured to adhere to specific rules to avoid self dealing. Those rules would be known by the custodians who would help you set up the right structure, it's well buried within IRS regs, I'm sure. Last, in general, using IRA funds to invest in the non-traditional assets adds that other layer of risk, that the investment will be deemed non-allowed and/or self-dealing. So, even if you have the best business idea going, be sure you get proper council on this.
There are no immediate tax-related benefits to putting money into a Roth IRA. You are investing after-tax money in the hope that the rules won't change and you'll be able to take out the money tax-free when you retire. Under current rules, you can take out your contributions at any time without penalties or taxes. You can't take out earnings without penalties until you retire. You said you don't have any debt (great!). So if you have cash that you don't have other uses for, and you don't mind possibly tying it up for a long time, you can put money into a Roth IRA. I'd argue that if you have, say, $25-50/month to put into long term savings, it's a good habit to start. When you move into a job that gives you more disposable income, you can increase this amount. The earlier you start, the lower the monthly amount you'll need to contribute towards a comfortable retirement. Once you get started putting a little bit away, you'll never miss it. With a Roth IRA, you can withdraw the contributions at any time without penalty as long as you don't withdraw the earnings/interest. There are some circumstances where you can withdraw the earnings such as disability (and maybe first home). Also, the Roth IRA doesn't need to go through your employer and I wouldn't do it through your employer. I have mine setup through Fidelity though I'm not sure if they have any guaranteed 3% return unless it was a CD. All of mine is in stocks. Your wife could also setup a Roth IRA so over 2 years, you could contribute $20,000. If I was you, I would just max out any 403-b matches (which you surely are at 25% of gross income) and then save my down payment money in a normal money market/savings account. You are doing good contributing almost 25% to the 403-b. There are also some income limitations on Roth IRAs. I believe for a married couple, it is $160k. One of the links showed: Specifically, for 2013, your child can contribute the lesser of: her earned income for the year or $5,500. This is correct. And while I have no issue with fool.com in general, I am a strong believer that when one cites numbers like this, the article should also state the year involved. As I quoted above.  Littleadv's answer was pretty comprehensive. All I'd add is that for a child who is likely in the zero bracket for earned income, the Roth is preferable.  Last, not to nit-pick, but the deposit does not need to be their money. My daughter earned $2300 in 2012, her $2000 Roth deposit can be from my gift to her. Or from any source. No paper trail as to the source of income is required, only that the income exist.  On re-reading I see I left out - the deposits can be spread over as many accounts as you wish, and the total is for IRA/Roth IRA total. It's silly to take small sums and create multiple accounts. Until the value is above a certain level, just find the one broker who can cover what you want to invest in. You have three options. If you follow the procedures outlined by the IRA trustee there should not be any problems. There will not be any taxes involved, unless as part of the process you change non-Roth funds  to Roth funds, or you don't follow the procedures. In my experience the IRA companies know how to handle the transfer. In some cases the check must be sent to you, and then you send it to the IRA company, but they will tell you exactly how the check is to be made out to. I would start by talking to the IRA trustee they are likely to have seen it all, and can guide you through the process. TL;DR: No, it doesn't count against the Roth IRA basis. You can find out by looking at Form 8606 Part III, which is the part for distributions from Roth IRA. Line 19 is the sum of nonqualified distributions, plus qualified first-time homebuyer distributions. You would put $10000 here. Then you would subtract $10000 on line 20 (qualified first-time homebuyer expenses) to get $0 on line 21. You enter your basis on line 22, but since line 21 was 0, you stop. You do not subtract anything from your basis. If you take out more than $10000, then it's only the part over $10000 that is subtracted from your basis. Anybody can contribute to a traditional ira up to the maximum limit.  Does it make sense to contribute to a non-deductible IRA?  There are a couple of cases where it does:  If you're 59 1/2 or older, you're old enough to make IRA withdrawals without penalty. If you choose investments that maximize the value of tax deferral, you can use the nondeductible IRA to manage your tax burden. If you're aware of an upcoming change in tax law that will benefit high earning individuals, it might be beneficial to use a nondeductible IRA. For example - you know that income limits for converting a traditional to a Roth are going to change in the coming year. You set up a nondeductible IRA with the intention of converting it the next year, so you can get around Roth contribution rules.  Beyond these cases, the main argument for contributing to a non-deductible IRA is -- compounded returns. If your IRA has a strong, steady growth rate, compounded returns can work wonders for your contributions. Let's take a hypothetical... You are 35. You contribute the max amount of $5,500 every year until you retire at 70. With a modest growth rate of 9.5%, your total contribution of 193K would become 1.46M. The compounded returns are 7.6 times your contributions. Absolutely. An IRA works just like any other brokerage account except that there are constraints on contributions and withdrawals. You can invest in just about anything you'd like. Because the title of your question is slightly ambiguous I'll add this for clarity. You can't directly add stocks to an IRA account. You can only fund it with cash. However, you can buy any stock you want with the cash you transferred into the account. If you want to move a stock into an IRA account from another account you will need to cash it out first, transfer the cash, then re-buy the stock. A self-directed IRA could be a good solution for you and all IRAs are qualified IRAs the administrator must allow for alternative assets. However, if you're looking to do the ROBS (Roll Over Business Start-up) system, there are not very many administrators that can facilitate that. There is also a checkbook IRA (aka single member LLC) that more administrators are able to work with, but the rules are different from a ROBS plan. Check with your financial adviser, CPA, tax guru and ask which method would work best for what you're looking to accomplish.