Withdrawals from your Traditional IRA will be treated as ordinary income, and if you are under age 59.5 when the distribution occurs, the amount will be subject to an early-withdrawal penalty of 10% (of the amount withdrawn). The amount will be exempted from the early-withdrawal penalty if you meet one of the following exceptions:
-You plan to use the distribution towards the purchase or rebuilding of a first home for yourself or a qualified family member (limited to $10,000 per lifetime).
-You become disabled before the distribution occurs.
-Your beneficiary receives the assets after your death.
-You use the assets for medical expenses for which you were not reimbursed.*
-Your distribution is part of a SEPP program.
-You use the assets for higher-education expenses.*
-You use the assets to pay for medical insurance after you lose your job.*
-The assets are distributed as a result of an IRS levy.
-The amount distributed is a return on non-deductible contributions.
* Limitations apply
(For related reading, see Avoiding IRS Penalties On Your IRA Assets.)
This question was answered by Denise Appleby.
Determine whether 403(b) contributions meet federal guidelines. Contribution limits to this retirement plan are determined ...
Learn whether distributions from a 403(b) plan can be rolled over, where they can be rolled over to and what the income tax ...
Learn key differences between 401(k) and 408(k) plans. Employers provide different options to help employees save for retirement, ...
Find out the differences and the similarities between a 408(k) retirement plan and a simplified employee pension (SEP), and ...
A corporate action in which a company buys most, if not all, ...
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 ...
A rollup (also known as a "roll up" or a "roll-up") ...
Also known as Social Security Death Index. A list of people whose ...