You can withdraw funds from your simple, called traditional, Individual Retirement Account (IRA); however, there are some restrictions. If you make the withdrawal less than two years after opening it, and are less than 59 1/2 years old, you will pay 25 percent of the withdrawn fund amount as a penalty. If you wait two years after opening the account, but are not yet 59 1/2, you will pay a 10 percent penalty on the withdrawn funds. An exception to the penalty is if you are withdrawing the funds to roll them over to another IRA. This penalty is addition to regular income tax liability on the withdrawn funds.Other exceptions include the need to pay large medical bills, a disability or payment to your beneficiaries in the case of your death.
Locate your latest IRA statement. Check it to be sure the latest deposit has been recorded.
Determine how much you wish to withdraw. Keep in mind this account was set up for your retirement, so you probably want to withdraw as little as possible so you can continue saving toward those "golden years."
Visit the financial institution that holds your IRA account. You will need to fill out some paperwork to withdraw the funds. Alternatively, you can also call the institution and ask if they have an online capability for IRA withdrawal.
Let the financial institution know if you are rolling the funds into a different IRA account, have large medical bills to pay or have another qualifying tax-exempt reason for the withdrawal. This will keep you from having to pay the penalty for the withdrawal. If you do not have an exempt reason for the withdrawal, remember to figure the tax amount into the total withdrawal, along with your income tax liability on the money, so you get the amount you actually need in cash.
Sign the final documents and collect your check.
- Jupiterimages/liquidlibrary/Getty Images