Optimal Finance Daily - Financial Independence and Money Advice 3390: How to Withdraw Money From Your IRA Penalty Free by Jeff Rose of Good Financial Cents on Smart IRA Withdrawals
11 snips
Dec 17, 2025 Explore penalty-free ways to access your IRA funds when needed most. From covering medical expenses to handling education costs, learn who qualifies for early withdrawals. Discover rules that apply if you're unemployed, a first-time homebuyer, or facing permanent disability. Plus, find out how to use IRA funds for IRS debts and military service member exemptions. This insightful guidance is essential for navigating tough financial times while safeguarding your retirement.
AI Snips
Chapters
Transcript
Episode notes
Raid Retirement Only As Last Resort
- Touching retirement funds should be a last resort because withdrawals reduce compounding.
- Frequent withdrawals shrink future retirement security even if penalties are avoided.
Taxes Still Apply To Traditional IRAs
- Pay taxes on Traditional IRA withdrawals even when penalty is waived.
- Roth contributions are always withdrawable but earnings need age 59½ and a five-year test.
Medical Expenses Over 10% Qualify
- Use IRA funds penalty-free for medical expenses exceeding 10% of your income.
- Only the portion above that 10% threshold avoids the 10% early withdrawal penalty.