A guide to traditional IRA withdrawal rules
The rules and potential penalties for a traditional IRA withdrawal depend on your age and purpose for taking money out of the account.
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Lead Writer Tax-deferred accounts such as traditional IRAs come with a caveat: strict IRA distribution rules, both before and after retirement.
The basics of traditional IRA withdrawals
- At age 59 ½, you can take penalty-free withdrawals from your traditional IRA. You’ll still owe income taxes, which is a feature of traditional IRAs compared to Roth IRAs.
- After age 73 (increasing to age 75 in 2033), you must take an annual withdrawal, known as a required minimum distribution (RMD) from your traditional IRA . These distributions are taxed as ordinary income and are required because the money in the account grew tax-free, and the IRS will only let you defer taxes for so long. To calculate your RMD, you divide your account balance by a life expectancy factor published by the IRS, but you can withdraw more than the required amount if you choose. If you don't take these distributions or if you don't withdraw enough, you may be subject to a 25% tax on the money you didn't withdraw. If you correct your RMDs within two years, you may get the tax lowered to 10% .
- If you’re between 59 ½ and 73, you’re in that sweet spot when you can do what you want — you don’t have to take distributions from the account, and leaving that money invested can allow it to continue to grow tax-deferred. If you do want to begin distributions, you can. You’ll pay taxes, but no penalty.
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Making an early withdrawal from your traditional IRA
If you want to withdraw from your traditional IRA before 59 ½, there is a 10% penalty on the withdrawal amount (on top of ordinary taxes). Your withdrawal will also be included as taxable income when you file your federal tax return.
There are some exceptions to the 10% penalty, which depends on what the withdrawal is for. Below are certain exceptions:
- Birth or adoption of a child: In the year following the birth or adoption of your child, you can withdraw up to $5,000 without penalty. If married, each spouse can withdraw up to $5,000 from their own IRAs. The money can also be repaid without counting toward the annual contribution limit for the year.
- Death or total and permanent disability: If you become disabled, IRA distribution rules say you can tap traditional IRA funds without penalty. If you die, your account beneficiary or estate will be able to do so.
- Disaster relief: Victims of federally declared disasters can make a withdrawal of up to $22,000 if they meet IRS qualifications.
- Domestic abuse survival: People who have survived domestic abuse from a partner or spouse can take an IRA distribution of 50% of the account holdings or $10,000, whichever is less.
- Emergency distribution: Account holders can make one withdrawal per year for a qualifying emergency, up to $1,000.
- Home purchase: You can use up to $10,000 from your traditional IRA toward the purchase of your first home — and if you’re purchasing with a spouse, that goes for each of you. The IRS’ definition of first home is pretty loose: You’re considered a first-time homebuyer under this rule if you or your spouse hasn’t owned a principal residence in the last two years. You must use the money within 120 days of the distribution, so time your withdrawal carefully. This exception could also be used to purchase the first home for you or a spouse’s child, grandchild, parent or certain other relatives.
- Medical expenses and health insurance premiums: You’re allowed an IRA distribution to pay for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. For example, if you make $100,000 and have $15,000 in unreimbursed medical costs, you can use IRA assets to pay for $7,500 of it. You're also allowed to make IRA withdrawals to pay for health insurance premiums for you, your spouse or children when you are unemployed.
- Qualified higher education expenses: IRA withdrawal rules allow you to use traditional IRA money to pay for higher education expenses not only for yourself but also for immediate family members. Expenses that fall under this rule include tuition, fees, books and supplies.
- Rollovers: If you want to transfer money from one IRA to another IRA or other qualified retirement plan, you have 60 days to deposit the money without paying the 10% penalty.
- Substantially equal payments: You don’t have to pay the 10% penalty if you start a series of distributions from your IRA that are spread equally over your life expectancy. The fine print: If you turn this fire hose on, you can’t turn it back off — you must take at least one distribution each year, and you can’t modify the schedule of payments until five years have passed or you’ve reached age 59 ½, whichever is later.The amount of the distributions must be based on an IRS-approved calculation that involves your life expectancy, your account balance and interest rates .
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- 1. United States Senate Committee on Finance. SECURE 2.0 Act of 2022. Accessed Jan 27, 2026.
- 2. IRS.gov. Retirement plan and IRA required minimum distributions FAQs. Accessed Jan 27, 2026.
- 3. Internal Revenue Service. Retirement topics - Exceptions to tax on early distributions. Accessed Jan 27, 2026.
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