Traditional IRA
Hi Ed Slott
I am a resident home owner on Long Island below 59 years old & own a traditional IRA. Until I can secure employment again, to cover living expenses, I plan to withdraw 25% from my IRA. I reviewed the common exceptions to avoid penalty, like health insurance, none apply. Is there any tax or penalty relief in regards to breaking the IRA, if unemployed? Is the penalties 10 % plus federal & state taxes of original withdraw amount. I was considering meeting with an IRA Advisor/CPA just for piece of mind. Thank you
Permalink Submitted by Alan Spross on Tue, 2012-09-11 21:41
The only penalty exception connected to unemployment is the exception for the costs of medical insurance once you have collected 12 consecutive weeks of UC. In addition, the NYS exception up to 20k of IRA distribution income does not kick in until age 59.5.
Do you have an employer retirement plan such as a 401k with your former employer? If so, what was your age when you separated from service?
How many years left till you reach 59.5?