Avoiding Penalty With Early Withdrawal From IRA’s
I am 57, unemployed, and I’m receiving social security disability, combined with withdrawals from my savings to make ends meet. My savings is almost fully depleted. How may I make early withdrawals from my IRA’s without receiving the 10% early distribution penalty?
Permalink Submitted by Alan - IRA critic on Tue, 2016-05-03 18:47
You probably qualify for the disability penalty exception by receiving SSDI, but you would be on more solid ground to get a letter from your MD stating that you meet the definition of disability per Sec 72(m)(7) because SSDI uses a slightly different definition for awards. You would claim the penalty exception by filing Form 5329 and entering exception code 03 on line 2. Even better if you forwarded the letter to your IRA custodian and requested that they code the 1099R with code 3 to reflect the disability.