If you are younger than 59½: Withdrawals are subject to a 10% penalty in addition to the regular federal and state income tax.
You may be able to avoid the penalty on early withdrawals under these circumstances:
- First-time home purchase up to $10,000
- Qualified education expenses
- Death or disability
- Unreimbursed medical expenses
- Health insurance if you're unemployed
- Under certain circumstances, other IRS sections may allow withdrawals prior to age 59½. Your Investment Counselor can provide additional information.
If you are 59½ or older: All withdrawals are allowed without IRS penalty. Regular income taxes still apply.
Starting in the year you turn 70½: You must take required minimum distributions. The amount of the distribution depends on how much you have saved in the account and on your life expectancy, according to tables published by the IRS.