Are there situations when I can withdraw from my retirement account without paying a penalty?
Taking money out of your IRA is not like taking money out of a savings account. Withdrawing before age 59 ½ could result in IRS penalties and taxes.
When withdrawing funds from your IRA you may be able to avoid early withdrawal penalties (but not taxes) in several situations, including, but not limited to, the following:
- First-time home purchase (up to a $10,000 lifetime maximum).
- For qualified higher education expenses: To pay toward college expenses for the account holder, or for the account holders' spouse, children, and grandchildren.
- Unreimbursed medical expenses within certain limits or health insurance if you’re unemployed.
- The distribution is made in substantially equal periodic payments (minimum 5 years or until the IRA owner reaches 59½).
- You become permanently disabled.
Please consult your tax professional for a full list of situations and determine if this type of withdrawal is right for you.