A. Yes, early withdrawals from retirement accounts may be unavoidable in a tough environment, below are exceptions you can avoid the 10% early distribution penalty:
Retirement Plans (e.g. 401(k)) and IRAs (including SEP and SIMPLE IRAs)
- Death
- Disability
- Annuitizing (72(t)-substantially equal periodic payment)
- Medical expenses
- IRS levy
- Active reservists
- Birth or adoptio
IRAs only (including SEP and SIMPLE IRAs)
- Higher education expenses
- First time homebuyer
- Health insurance if you are unemployed
Retirement Plans only
- Age 55
- Age 50 for public safety workers
- Section 457(b) (governmental) plans
- Divorce (QDRO - Qualified Domestic Relations Order)
- Phased retirement distributions from federal plans