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Retirement & Planning
 

Age 59 and Under

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IRA Withdrawals: Age 59 and Under

If you make IRA withdrawals before age 59½, you may have to pay a 10% penalty in addition to income tax. Below, you'll find exceptions that may allow you to make a withdrawal without a penalty.

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The U.S. government charges a 10% penalty on early withdrawals from a Traditional IRA, and a state tax penalty may also apply. You may be able to avoid a penalty if your withdrawal is for:

First-time home purchase Some types of home purchases are eligible. Funds must be used within 120 days, and there is a pre-tax lifetime limit of $10,000.
 
Educational expenses Some educational expenses for yourself and your immediate family are eligible.
 
Disability or death If you're disabled, you can withdraw IRA funds without penalty. If you pass away, there are no withdrawal penalties for your beneficiaries.
 
Medical expenses You can avoid an early withdrawal penalty if you use the funds to pay unreimbursed medical expenses that are more than 7.5% of your adjusted gross income (AGI).
 
Health insurance If you're unemployed for at least 12 weeks, you may withdraw funds to pay health insurance premiums for yourself, your spouse, or your dependents.
 
Periodic payments You can avoid an early withdrawal penalty if you choose to receive your funds on a regular distribution schedule.
 
Involuntary distribution If a distribution is the result of an IRS tax levy, IRS Form 5329 explains how to claim your penalty exception.
 
Reservist distributions Members of the National Guard and reservists can take penalty-free distributions if they are called to active duty for at least 180 days. Some restrictions apply.




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Call 866-855-5636.