What to know about early IRA withdrawals – EDWARD JONES

Written by on December 1st, 2021

An IRA is designed to help you save for retirement. But should you ever tap into it earlier?

Ideally, you should keep it intact until you retire. However, life is unpredictable, and you may encounter situations in which you’ll consider taking money from your IRA. In most cases, though, if you touch your account before you turn 59½, you’ll face taxes and a possible 10% penalty. If you have a Roth IRA, rather than a traditional IRA, you can always withdraw your contributions without taxes or penalties, but the earnings may be taxed and penalized if you’re younger than 59½.

You could at least avoid the penalty under some circumstances, such as when you use IRA withdrawals to pay for college, or for a first home, or to cover unreimbursed medical expenses.

In any case, if you can put away several months’ worth of living expenses, you may be able to avoid touching your IRA early. It’s there for your retirement – so give it a chance to grow.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor, Casey Caliva, at Historical 30th & Fern. 

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation.

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