Is there a penalty for early withdrawal from a traditional IRA?
Yes. However, certain distributions are exempt from the 10% premature distribution penalty. Withdrawals made before attainment of age 59½ are exempt from the penalty if made: • For the first-time purchase of a home (lifetime limit of $10,000), • For the payment of qualified higher education expenses, • To an alternate payee pursuant to a divorce decree or separation agreement, • For the payment of medical expenses in excess of 7.5% of AGI, • For payment of health insurance premiums during certain times of unemployment, • As a series of substantially equal payments and/or • As a result of disability or death of the IRA participant.
