<prompt> Human: My wife and I are both professionals. Between the two of us we make about 150k. We have a good sized savings that began as our wedding presents and to which we have been adding money every month since. It is about 50,000. This is money that we plan on using to purchase a house, and never touch it. My mother in law normally does our taxes, as she was an accountant by trade. I had the idea of opening an IRA for the tax deduction from our house savings funds with the knowledge that we can make a one time withdrawal for the purpose of purchasing a house. We would like to get a larger tax refund now, but I am worried about taking money out of our never touch it savings. My understanding is that there will be no penalty for withdrawing the money from the IRA for the purchase of the home, but that the entire amount would be taxable as income. In the end it feels like it is a little risky and it only has the advantage of pushing the taxes back a few years, when we may even be in a higher tax bracket for all I know... My mother in law thought it was a great idea and that we should put 5k into an IRA for each of us. What do you think? Is this a solid move or just a minor saving?edited to fix spelling mistakes.Also, we have never owned a home before. This would be our first home purchase.  <response>: Youre only allowed to contribute so much to your IRA each year. If you use that contribution for something short term, youre giving up the decades of tax-free accumulation youd get if you waited until retirement to withdraw. Youre deferring the tax burden for 2-4 years if you use it to purchase the house, but youre giving up the opportunity to defer it 20-30 or howevermany years. 