The IRS imposes a 10% penalty on the early IRA withdrawals to encourage you to keep your retirement savings in place. Life can throw us curveballs and present situations in which you may need to dip into your IRA savings. Here are (9) instances in which you could take an early withdrawal and avoid the 10% penalty charge:
1. Death
2. Disability
3. Substantially Equal Periodic Payments
4. Home Purchase
5. Unreimbursed Medical Expenses
6. Medical Insurance
7. Higher Education Expenses
8. IRS Levy
9. Active Duty Call Up
As a rule of thumb, we encourage each of our clients to have an emergency fund to cover untimely expenses. Finally, we encourage everyone to contact their trusted tax professional who can help you determine which option may be your best.