IRA withdrawals: Age 59 and under

Penalty-free IRA withdrawals must occur after age 59½, with a few exceptions. Learn more about IRA withdrawals at age 59 and under.

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If you make IRA withdrawals

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.

Traditional IRA rules

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.

Roth IRA rules

Withdrawals from a Roth IRA you’ve had less than five years.

Roth IRA earnings are subject to a penalty if you take a distribution during the first five years you have the account, with the following exceptions:

  • You use the withdrawal (up to a $10,000 lifetime maximum) to pay for a first-time home purchase.
  • You use the withdrawal to pay for qualified education expenses.
  • You're at least age 59½.
  • You become disabled or pass away.
  • You use the withdrawal to pay for unreimbursed medical expenses or health insurance if you're unemployed.
  • The distribution is made in substantially equal periodic payments.

Withdrawals from a Roth IRA you've had more than five years.

The IRS treats a Roth IRA withdrawal made more than five years after the first tax year in which you made a contribution (including earnings) as a "qualified distribution." This means it is not taxable or subject to a penalty as long as you satisfy one of the following conditions:

  • You're at least age 59½.
  • You become disabled or pass away.
  • You use the withdrawal (up to a $10,000 lifetime maximum) to pay for a first-time home purchase.

Inherited IRA rules

With an Inherited IRA—not an IRA that you've simply transferred on your own—there are several important factors that impact your annual distributions. Keep in mind:

  • You need to take a distribution regardless of your age.
  • Generally, you need to take distributions over your lifetime or within five years after the original account holder passed away.
  • With an Inherited Traditional IRA, you will pay taxes on distributions. Rollover, SEP, and SIMPLE IRAs become Inherited Traditional IRAs.
  • With an Inherited Roth IRA, you will not pay taxes on distributions.

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    Questions about IRA withdrawals or RMDs? Call 866-855-5636.

This tax information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner, or investment manager. Depending on the type of account you have, there are different rules for withdrawals, penalties, and distributions.  Please understand these before opening your account.

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