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
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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.
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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.
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.
Pay Health Insurance While Unemployed
- If unemployed and receiving 12 consecutive weeks of unemployment, use IRA money to pay health insurance premiums penalty-free.
- This applies to premiums for yourself and your family.