A. Here are 5 strategies you can consider so you can take your retirement money penalty-free before the age 59:
Participate Substantially Equal Periodic Payment (SEPP) Program
IRS offers the SEPP program that allows you to withdraw funds from your pre-tax IRA and 401(k) accounts before you turn 59½ penalty-free. A SEPP program can be started for an IRA at any time, as long as you keep it going for at least five years or until you are 59½, whichever is longer. You still have to pay income taxes, but the withdrawal is not subject to the early withdrawal penalty.
Take Early 401(k) withdrawals if you retire at 55 or later
If you leave your job after age 55, it doesn't matter whether you quit, retire, or are fired, you can withdraw penalty-free money from your 401(k). However, you cannot take penalty-free early withdrawals from previous employers if you left that company before you turned 55. The workaround is to move the money into your current employer's 401(k) before you quit if you need access to the funds early.
Withdraw money from a Roth IRA
While the best strategy is to delay Roth IRA withdrawals as long as possible because the money can generally be withdrawn tax free in retirement, but you can access contributions to your Roth IRA at any time. However, the portion of your Roth IRA balance that comes from earnings will need to stay in the Roth IRA until you are 59 1/2 if you want to avoid penalties.
Do a Roth conversion and then wait five years
Convert your pre-tax funds to a Roth and then wait five years, you can then take money out penalty-free. You'll need to calculate the numbers to make sure a Roth conversion is best for your tax situation, which typically is the year you don't have regular taxable income..
Use a taxable investment account
If your goal is to retire long before your 60s, you'll probably need to do some of your saving and investing in a taxable investment account. This money can be withdrawn and spent at any age without penalty. Just make sure you take into account that you may need to pay capital gains taxes on your gains when you sell your investments.