IRA Withdrawal Rules
09/11/2011 0 comments
- If you are under 59 1/2 years old
- Traditional IRA: regular income tax + 10% penalty
- Roth IRA:
- Contributions: no tax and penalty;
- Investment earnings: regular income tax + 10% penalty.
- IRS considers the withdrawl in the following order: contributions, money converted from traditional IRA and then investment earnings.
- If you are 59 1/2 years older
- Traditional IRA: penalty-free for qualified distributions. Pay regular income tax.
- Roth IRA: qualified distributions: at least five year conversion from traditional IRA or start of an account. No income tax and no penalty for qualified distributions.
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