How to Tap an IRA Early Without a Tax Penalty

[Bob Of Burleson]

If You Must Withdraw Cash Before Age 59½, There Are Ways to Avoid a 10% Penalty

The Wall Street Journal

. . .

If you have lost your job and collected 12 consecutive weeks of state or federal unemployment compensation, you can use money from an IRA at any age, without penalty, to pay health-insurance premiums. There also is no penalty if an early distribution goes for qualified higher-education expenses, such as college or vocational-school tuition for yourself, your spouse, your children or grandchildren, or your spouse's children or grandchildren.

You can withdraw up to $10,000—$20,000 for a couple—penalty-free to buy, build or rebuild a first home, and that, too, applies for children and grandchildren. There also is an exception if the money goes to pay for unreimbursed medical expenses greater than 10% of your adjusted gross income (7.5% if you or your spouse was born before 1949). You also would be exempt from the penalty if you become disabled before you are 59½.

MORE WAYS TO BEAT THE PENALTY

[GFB]

You can also withdraw up to the amount you put in from a Roth IRA.

But, try not to do any of these things. You started a Roth or Traditional IRA for your retirement. That was a good plan, you don't want to blow it up unless you have to.