Tapping an IRA to Pay Education Expenses? Avoid These 4 Mistakes
Are you facing big college tuition bills? Generally, if you take a taxable distribution from your IRA before you reach age 59 ½, you will be subject to an additional 10% early distribution penalty. However, an exception to the penalty allows you to take a penalty-free distribution from your IRA if you use the funds for qualified higher education expenses. If you decide to tap your IRA early in order to pay for education costs, you will want to avoid these four mistakes that others have made.