When Can I Withdraw Funds Without Incurring the 10 Percent Premature-Distribution Penalty Tax?
Traditional IRA–You can withdraw funds from your traditional IRA without incurring the 10 percent premature-distribution penalty tax any time after you reach age 591/2. You can avoid the penalty tax before age 591/2 for the following reasons: disability, substantially equal periodic payments, medical expenses in excess of 7.5 percent of your adjusted gross income, health care insurance if you have been receiving unemployment compensation for at least 12 weeks, distributions paid directly to the IRS due to an IRS levy, conversion to a Roth IRA, recharacterization, rollover to a qualified plan, qualified higher education expenses, or a first-time home purchase. Roth IRA–The 10 percent premature-distribution penalty tax does not apply before age 591/2 for the withdrawal of earnings or for converted assets withdrawn within five years of the conversion for the following reasons: disability, substantially equal periodic payments, medical expenses in excess of 7.5 percent of your adjusted g
