• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Wilcox Attorneys, PA

Wilcox Attorneys, PA an Arkansas Estate Planning & Trust Information Center

Northwest Arkansas Estate Planning Attorneys (479) 443-0062

Client Vault
  • Home
  • Our Firm
    • Our Firm
    • About the American Academy
    • Advantages of Working With Our Firm
    • Attorney and Staff Profiles
    • News & Events
    • Speaker Connection
  • services
    • Asset Protection & Business Planning
    • Elder Law & Medicaid Services
    • Estate and Gift Tax Figures
    • Estate Planning Services
    • Family-Owned Businesses & Farms
    • Incapacity Planning
    • Legacy Planning
    • Pet Planning
    • Secure Act
    • Special Needs Planning
    • Trust Administration & Probate
  • Webinars
  • Practice Areas
  • Resources
    • DocuBank
    • Elder Law Reports
    • Estate Planning Resources
      • Estate Planning Articles
      • Estate Planning Checkup
      • Estate Planning Definitions
      • Estate Planning Reports
      • Incapacity Planning Definitions
      • Is Your Estate Plan Outdated?
      • Top 10 Estate and Legacy Planning Techniques
    • Frequently Asked Questions
      • Estate Planning
      • Frequently Asked Questions for Families Without an Estate Plan
      • Incapacity Planning
      • Legacy Wealth Planning
      • Medicaid Planning
      • Pet Planning
      • Probate
      • Trust Administration & Probate
    • Newsletters
    • Pre Consultation Form
    • Trust Administration & Probate Resources
      • Bereavement Resources
      • How to Know if You Need Extra Help With Your Grieving
      • Loss of a Loved One
      • The Mourner’s Bill of Rights
      • Things You Need To Do When a Loved One Passes Away With a Trust
      • Things You Need To Do When a Loved One Passes Away With a Will
      • Trust Administration & Probate Definitions
  • Reviews
    • Our Reviews
    • Review Us
  • Contact Us
  • Blog

When Can I Access My IRA?

June 25, 2015 by Deb Sexton Leave a Comment

when can I access my IRAWhile you can technically withdraw from your IRA at any time, the question is, do you want to incur a penalty for doing so?  The government charges penalties for early withdrawals from IRAs in order to discourage us from depleting them before we even reach retirement age.  An IRA is a retirement account after all.  However, there are some exceptions.  So, if you are wondering, “when can I access my IRA?” the answer depends on how badly you need it.

What are the early withdrawal penalties?

When you reach age 59 ½, you can withdraw money from a traditional IRA with no penalty.  If you are younger than 59 ½, the penalty is 10% of the total amount you withdraw, in addition to the required income taxes you must pay.  A Roth IRA is different.  You are allowed to withdraw the total amount of your contributions to a Roth IRA at any time.  However, if you withdraw any of the earnings of a Roth IRA before you reach age 59 ½, you will be assessed a penalty.

Withdrawals after age 59 ½

After age 59 ½, withdrawals are penalty-free with a traditional IRA.  However, you are still required to pay income taxes on any withdrawals. Withdrawals from Roth IRAs, after age 59 ½, are penalty-free as long as five years have passed since the first contribution to the account.

Exceptions to the early withdrawal penalties

You may be able to avoid a penalty if you pay back a contribution to a traditional IRA, if you do so before the tax filing deadline and do not deduct the contribution from your personal income taxes. You can also avoid penalties when you roll your traditional IRA over into another qualified retirement account within 60 days. You may avoid the penalty, but you still do not get the opportunity to spend those funds.  Finally, there are specific reasons for withdrawing money from your IRA that will not incur the 10% penalty, including the following:

  • Paying college expenses for you, your spouse or your immediate family.
  • Paying medical expenses greater than 7.5% of your adjusted gross income.
  • Paying for a first-time home purchase (up to $10,000).
  • Paying for the costs of a sudden disability.

There is one other exception, if none of these apply to your situation – making substantially equal periodic payments.

“Substantially Equal Periodic Payments”

There may be a situation, that does not fit into the exceptions listed above, that makes an early withdrawal unavoidable.  If that is the case, you can look into what is referred to as “substantially equal period payments.”  This option applies to traditional IRAs this is how it works:  The IRS determines how much you can receive each year, based on your life expectancy,  then you are allowed to withdraw that amount every year.

The catch is, once you start receiving these periodic payments, you cannot change your mind.  You must continue to receive the payments until you turn 59 ½ or five years have passed, whichever period of time is longer.  Otherwise, you will be assessed a 10% penalty, retroactively from the date of the first payment.  Depending on your circumstances, the advantages may outweigh the disadvantages.  Consult with a retirement planning attorney before making your decision.

If you have questions regarding IRAs, or any other retirement planning needs, please contact Wilcox Attorneys, PA online or by calling us at (479) 443-0062.

  • Author
  • Recent Posts
Deb Sexton
Latest posts by Deb Sexton (see all)
  • Estate Planning is Essential Whether You Are Married or Not - April 25, 2018
  • Income Tax Basis in Estate Planning – Part 2 - April 23, 2018
  • The Downsizing Generation: How to Handle a Surplus of Stuff When a Loved One Ages - April 18, 2018

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Wilcox Attorneys, PA

DOWNLOAD OUR FREE ESTATE PLANNING WORKSHEET

There's a lot that goes into setting up a comprehensive estate plan, but with our FREE worksheet, you'll be one step closer to getting yourself and your family on the path to a secure and happy future.

Subscribe to Our Blog

Subscribe to our blog for all the latest estate planning news and updates!

Office Address

Fayetteville
2766 Millennium Drive
Fayetteville, AR 72703
Phone: (479) 443-0062

Office Address

Prairie Grove
1100 Division Street, Suite 4
Prairie Grove, AR 72753
Phone: (479) 846-6026

( By Appointment Only )

Office Hours

Monday9:00 AM - 5:00 PM
Tuesday9:00 AM - 5:00 PM
Wednesday9:00 AM - 5:00 PM
Thursday9:00 AM - 5:00 PM
Friday9:00 AM - 12:00 PM

Map

map for office
  • Facebook
  • LinkedIn
  • RSS
  • Twitter
  • YouTube

footer-logo

© 2023 American Academy of Estate Planning Attorneys, Inc.