The exceptions are as follows:
- The distribution is made on or after the date you reach age 59.5
- The distribution is made while you are disabled and you can furnish proof that you cannot do any substantial gainful activity because of your physical or mental condition. A physician must determine that your condition can be expected to result in death or to be of long, continued and indefinite duration.
- The distribution is part of a substantially equal periodic payment (SEPP).
- The distribution is made by your beneficiary after your death.
- The distribution is made as a result of an IRS levy.
- The distribution is used for a first-time home purchase for you or an eligible family member (subject to a lifetime limit of $10,000). This includes expenses to build or rebuild a first home.
- You have unreimbursed medical expenses that are not more than (a) the amount you paid for unreimbursed medical expenses during the year of the distribution, or (b) minus 7.5% of your adjusted gross income for the year of the distribution.
- You are paying medical insurance premiums for yourself, your spouse and your dependents after losing your job and:
- You received unemployment compensation paid under any federal or state law for 12 consecutive weeks because you lost your job.
- You receive the distributions during either the year you received the unemployment compensation or the following year.
- You receive the distributions no later than 60 days after you have been reemployed.
- The distributions are not more than your qualified higher education expenses.
- The distribution is attributed to amounts that were non-taxable when converted.
- The distribution is attributed to amounts that have been converted for at least five years.
To learn more, read Avoiding IRS Penalties On Your IRA Assets.
Question answered by Denise Appleby, CISP, CRC, CRPS, CRSP, APA
Learn the difference between a chartered financial analyst and the Canadian pension plan. Explore Canadian retirement options ...
A reverse mortgage can be a great way to increase retirement income. Does it work for everyone? What happens after a homeowner ...
Setting up a trust to secure your assets for a beneficiary allows you to set the terms under which the beneficiaries are ...
Discover when and why accountants use amortization techniques in the context of pension plans, and why those changes help ...
Senior move managers (SMMs) help seniors downsize and relocate ...
Elder care, sometimes called elderly care, refers to services ...
Definition of Gold IRA
An IRS-allowed movement of assets into or out of an individual ...
Also known as Social Security Death Index. A list of people whose ...
The use – by a business owner or professional practitioner – ...