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Home > Individual Retirement Accounts > Withdrawals |
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Traditional IRA or Roth IRA When Can I Withdraw Funds without Incurring any IRS Penalties?Traditional IRA - Distributions from traditional IRAs and most employer-sponsored retirement plans are taxed as ordinary income and may be subject to an additional 10 percent federal income tax penalty if taken prior to reaching age 59½. This penalty may be avoided before age 59½ if you should become disabled, for qualified higher education expenses or for a first-time home purchase.* Roth IRA - Unlike a traditional IRA or an employer sponsored retirement plan, a Roth IRA is not subject to annual required minimum distributions after age 70½. As long as Roth IRA withdrawals take place after age 59½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum), and the account has been open for at least five years, distributions will be free of federal tax and penalties. When Must I Withdraw Funds?Traditional IRA - When you reach your age 70½ year, you must begin to take minimum required withdrawals or severe penalties will be imposed. Roth IRA - There are no required distributions from a Roth IRA. Talk with a Baylake Bank Customer Service Representative near you for more information about IRA withdrawals.
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*Consult your tax advisor.