IRA Rules
Individual Retirement Account Rules

IRA Rules And Information

 

IRA Early Withdrawal Penalty



10% Early Withdrawal Penalty Explained

The primary disadvantage of taking money out of an IRA or similar qualified retirement account is that you have to be at least age 59 1/2 or else you will be subject to a 10% early withdrawal penalty in addition to paying your normal income taxes on the distribution amount.

There are penalty withdrawal exceptions so check the list and if you still have questions consult your accountant or tax specialist to see if you meet one of the exceptions.

Even if you meet the exceptions, the money needs to be in the account for at least 5 years before the penalty exceptions are applicable.