An IRA is designed to help you save for retirement. But should you ever tap into it earlier?
Ideally, you should keep it intact until you retire. However, life is unpredictable, and you may encounter situations in which you’ll consider taking money from your IRA. In most cases, though, if you touch your account before you turn 59½, you’ll face taxes and a possible 10% penalty. If you have a Roth IRA, rather than a traditional IRA, you can always withdraw your contributions without taxes or penalties, but the earnings may be taxed and penalized if you’re younger than 59½.
You could at least avoid the penalty under some circumstances, such as when you use IRA withdrawals to pay for college, or for a first home, or to cover unreimbursed medical expenses.
In any case, if you can put away several months’ worth of living expenses, you may be able to avoid touching your IRA early. It’s there for your retirement – so give it a chance to grow.
This content was provided by Edward Jones for use by Daniel Pellerin, your Edward Jones financial advisor at 189 East Main Street Suite G, in Newport, (802) 334-6261.
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