What is an Early IRA Withdrawal?
An early IRA withdrawal is the act of removing funds from an existing individual retirement account prior to reaching the age of retirement, or at least the calendar age of 59 and ½. When this action is taken, there are often substantial penalties incurred as a result. However, there are two distinct exemptions for early IRA withdrawal activity that are roughly categorized as hardship distributions. The first type of early IRA withdrawal that can escape tax and other penalties is the school exemption. This has to do with providing higher education for the individual, a spouse, or a child or grandchild. However, simply choosing to use an IRA distribution through withdrawal in order to pay tuition and fees at any college or university is not enough to escape the penalties. There are some qualifications that must be met in order for the early IRA withdrawal to not incur taxes and other damaging penalties. First, the early IRA withdrawal must be used to attend an educational institution t
An early IRA withdrawal is the act of removing funds from an existing individual retirement account prior to reaching the age of retirement, or at least the calendar age of 59 and ½. When this action is taken, there are often substantial penalties incurred as a result. However, there are two distinct exemptions for early IRA withdrawal activity that are roughly categorized as hardship distributions. The first type of early IRA withdrawal that can escape tax and other penalties is the school exemption. This has to do with providing higher education for the individual, a spouse, or a child or grandchild. However, simply choosing to use an IRA distribution through withdrawal in order to pay tuition and fees at any college or university is not enough to escape the penalties. There are some qualifications that must be met in order for the early IRA withdrawal to not incur taxes and other damaging penalties. First, the early IRA withdrawal must be used to attend an educational institution th
