IRA Withdrawals and Distributions

Whether you're ready to enjoy your retirement savings or just need extra cash, it's important to know the rules before withdrawing from an IRA.

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Before you decide to take money out of your Traditional IRA

Before you decide to take money out of your Traditional IRA, keep in mind that there are age restrictions for making a penalty-free withdrawal. The funds in your Traditional IRA account are meant to benefit you more in the long run, and withdrawing them early can minimize the potential gains on your earnings. You will also have to pay income taxes on the amount you distribute, as money in a Traditional IRA is tax-deferred. 

See more details about Roth IRA withdrawals and Inherited IRA withdrawal rules.
 

At a glance: taking money out of a Traditional IRA

  • Age 59 and under

    10% withdrawal penalty and taxes apply.

    The penalty may be waived for:

    • Unreimbursed medical expenses.
    • Higher education expenses.
    • First-time home purchase (up to $10,000).
    • Qualified birth or adoption expenses.

    See more withdrawal exceptions

  • Age 59½ & Above

    No withdrawal penalty but taxes apply.

    • Withdraw money penalty-free when you turn 59½.
    • Withdrawals are taxed as ordinary income.

    See more about withdrawals

  • Required Minimum Distributions

    Taxes apply.

    • You are required to make annual withdrawals called Required Minimum Distributions (RMDs) once you turn age 72 (70½ if you turned age 70½ before Jan 1, 2020).
    • Withdrawals are taxed as ordinary income.
    • A 50% penalty applies if you don't take an RMD.

    See more about RMDs

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