Cashing Out Early

Usually you'll pay tax penalties for draining your IRA early, but there are exceptions.

money in nest egg
(Image credit: Getty Images/iStockphoto)

If IRA tax breaks are the carrots Congress uses to encourage you to save for retirement, penalties for early withdrawal are the sticks that make sure you keep at it.

Not to worry, IRAs contain a number of penalty-free escape hatches. Here are the early-out rules to consider for traditional IRAs and Roth IRAs.

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