IRA withdrawals are restricted to certain ages and conditions.
If you have an Individual Retirement Account, knowing the withdrawal rules can save money now and when you are ready to retire. The type of IRA you have, traditional or Roth, will make a difference on how your withdrawals are taxed.
Regular Withdrawals
You can begin optional withdrawals without a penalty from an IRA when you reach the age of 59 years and 6 months.
Required Withdrawals
You will be required to begin taking annual withdrawals once you reach the age of 70 years and 6 months. At this point, the Internal Revenue Service assigns a withdrawal amount based on your average life expectancy.
Early Withdrawals
Before the age of 59 years and 6 months, any IRA withdrawal is considered to be early. This means that you'll owe penalties to the bank as well as a 10 percent tax to the IRS.
Exceptions
You can withdraw early from an IRA with no penalties to pay IRS-approved education costs for yourself, your spouse, a child or a grandchild. In addition, you can withdraw up to $10,000 to buy your first home, or if you want to buy a home and you haven't owned one within two years.
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