3390: How to Withdraw Money From Your IRA Penalty Free by Jeff Rose of Good Financial Cents on Smart IRA Withdrawals

What It Covers

Jeff Rose explains nine IRS-approved methods to withdraw money from traditional and Roth IRAs before age 59.5 without incurring the standard 10% early withdrawal penalty.

Key Questions Answered

• •Medical expenses exception: Withdraw penalty-free when unreimbursed medical bills exceed 10% of your annual income, though ordinary income tax still applies to traditional IRA withdrawals on the qualifying portion above that threshold.
• •First-time homebuyer provision: Extract up to $10,000 individually or $20,000 married for a principal residence purchase if you haven't owned a home in two years, applicable for yourself or qualifying family members including parents, children, or grandchildren.
• •Rule 72(t) for early retirement: Take substantially equal periodic payments using IRS-approved calculation methods for minimum five years or until age 59.5, whichever is later; any modification triggers retroactive 10% penalty plus interest on all distributions.