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While your IRA funds are yours, there are rules and often consequences to accessing those funds. Before you make an IRA withdrawal, consider your age, the reason for using the money, and the type of account you have. It may be best to have an accountant or tax professional help you navigate the process.
The IRA withdrawal rules can be complicated and accessing the funds without proper consideration can be costly. Although it is your savings, an IRA is designed to store money, generally until the account holder is 70 ½ years old, but if you are at least 59 ½ years old, you may be able to access it. Age is one of the most important factors to consider before taking any money from your IRA, however. If you do not, you may find that a significant portion of your funds are consumed by penalties and taxes.
Deductions a person makes from an IRA before she has reached the qualifying age are known as early withdrawals. There are some circumstances that can allow you to make an early IRA withdrawal without a penalty. These include if you become disabled, if you are purchasing your first home, or if you have unreimbursed medical expenses that exceed 7.5 percent of your adjusted gross income.
The type of account you have also matters. There are traditional IRAs and Roth IRAs. When you reach 70 ½, if you have a traditional IRA, you must deduct at least the minimum withdrawal amount by the end of each year. With a Roth IRA, you can deduct as little as you like or none at all because the total sum of money is allowed to stay in the account for as long as you like.
Once you have considered all of the factors pertaining to your IRA withdrawal, you need to consider how much money you want. Remember if you have a traditional IRA, even if you are qualified by age to access your funds, you will have to pay taxes on the amount you withdraw. When you have decided on an amount, contact the company or financial institution that is holding your account and follow the procedure to withdraw your money.