SIMPLE IRA Withdrawal

I have a client who needs to withdraw money from his SIMPLE IRA account that he currently contributes to through his company. He is under 59 1/2 and I understand there will be a 10% penalty. My question is does any of the exceptions to penalty apply to SIMPLE IRAs as they do to traditional IRAs?



Yes, the same penalty exceptions apply to all IRA types. However, note that if client has not met the 2 year SIMPLE IRA holding period, the portion that is penalized has a 25% penalty and that drops to 10% after the two years is met.



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