Retirement accounts, including traditional IRAs and Roth IRAs, are designed to help individuals save for retirement. In reality, however, sometimes people withdraw the money for other reasons. Here are some early withdrawal rules to keep in mind:

  1. If you take an early withdrawal from a traditional IRA with pre-tax dollars before you age 59 ½, you may be subject to a 10% early withdrawal penalty.
  2. Withdrawals are taxed as ordinary income and not as capital gains.
  3. If you roll over your account balance from one qualified retirement plan to another qualified retirement plan within 60 days, the transfer will not be subject to taxation or the early withdrawal penalty.
  4. There are some exceptions to the early withdrawal penalty. Contact us to see if this applies to your situation.

For additional information on IRS rules regarding early withdrawals, you can visit IRS publication 575 online or contact us. We can help you navigate the rules and determine how they apply to you.

To your wealth,

Joseph M. Maas, CFA, CVA, ABAR, CM&AA, CFP®, ChFC, CLU®, MSFS, CCIM
President of Synergetic Finance

Joe Maas