Are There Penalties for Taking Money Out of my 401(k) or IRA?
Are There Penalties for Taking Money Out of my 401(k) or IRA?
Do your best not to! Because…
If you are under 59 ½ and withdraw money from your IRA, you will pay taxes and a 10% penalty on the amount you take out. There are some circumstances when the penalty may be waived.
If you are over 59 ½, you will pay taxes but no penalty on the amount you take out.
You can withdraw the contributions you have put into your Roth IRA anytime and not pay taxes or a penalty on them. If you are over 59 ½ and your first contribution to the account was over 5 years ago, you can withdraw the earnings penalty-free and tax-free.
If you withdraw the earnings from your Roth IRA before the account is five years old and you are under 59 ½, you will pay taxes and a 10% penalty on the amount withdrawn.
If you withdraw the earnings from your Roth IRA before the account is five years old and you are over 59 ½, you will pay taxes on the amount withdrawn, but no penalty.
You will always pay taxes on the amount you withdraw from your 401(k). You will pay a 10% penalty if you are under 59 ½. There are some circumstances when the penalty may be waived.
