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When IRA Withdrawals Penalty-Free

By BARRY LISAK
Posted 9/27/19

Many IRA owners are aware they can be hit hard with penalty fees if they withdraw IRA money early. You should make every effort to avoid taking money out of your retirement accounts early, especially if you are young. By withdrawing money, you are losing decades of tax-free compounding which can cost you hundreds of thousands of dollars by the time you retire. However, here are some ways to avoid that penalty on early distributions:

Permanent disability of IRA owner. Money can be withdrawn without penalty in the event the IRA holder becomes permanently disabled before age 59½. A physician must determine that, because of mental or physical disability, you are unable to engage in any gainful employment.

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