Tap Your IRA Early Without a Penalty

Uncle Sam gives you a pass on the early-withdrawal penalty if you follow these complex rules.

EDITOR'S NOTE: This article was originally published in the December 2012 issue of Kiplinger's Retirement Report. To subscribe, click here.

Taking money from a traditional IRA early is rarely a good idea. It's best to allow the assets to grow tax-deferred. What's more, if you're younger than 59 1/2, you'll pay a 10% early-withdrawal tax penalty. But if you really need the cash—say, you're suddenly unemployed—you can avoid the penalty if you follow a number of complex rules.

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Rachel L. Sheedy
Editor, Kiplinger's Retirement Report