Tax Tip of the Week*

Early Withdrawal of Retirement Money

Just about everybody knows that if you take money out of an IRA or company retirement plan prior to reaching age 59 ½, you will be subject to a 10% penalty. There are a number of exceptions to that rule – and one of the most interesting, and difficult to use, as well as typically worthwhile only in the exception, is that anyone, for no reason at all, can take withdrawals from his/her IRA or retirement plan at any age and avoid the penalty. The “trick” is that the payments need to be relatively constant, and approximate an annuity type withdrawal (roughly meaning estimated over your anticipated lifespan) from that account or plan. Further, you cannot stop those withdrawals until you are at least age 59 ½. This is a complex area, but for those in need of IRA type funds who happen to have enough to make a difference in their lifestyle, it is something to consider.