An IRA puts you in the driver’s seat. When planning for your retirement, and saving through a Traditional and/or Roth IRA, you and your financial advisor choose investments, develop a contribution strategy, and determine the tax treatment of withdrawals.
We all know that things don’t always go according to plan. When life happens and events occur that may be outside your control, an IRA provides you with options. It allows you access to your retirement savings when you may need it most. You can tap into your IRA account when certain life events happen without incurring the 10% early withdrawal penalty. Below is a list of penalty-free exceptions that allow you to access your IRA prior to age 59 1/2.
Traditional & Roth1
|Higher Education Expenses||✓|
|First Time Home Buyer||✓|
|Health Insurance if your are unemployed||✓|
|Unreimbursed Medical Expenses||✓||✓|
|Age 55 and separation of service||✓|
|Divorce (Qualified Domestic Relations Order QDRO)||✓|
As you evaluate the need to take an early distribution from your IRA or qualified retirement plan, keep in mind that this may be a costly option as you will have to pay ordinary income taxes on the taxable portion of the withdrawal and you lose out on the continued investment growth of those funds for retirement. We strongly encourage you to consult your financial advisor and/or tax advisor on any additional considerations that may be relevant to your specific personal circumstances and their impact on your retirement goals.
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1Includes SIMPLE & SEP IRAs.
2Includes 401(k) Profit-sharing and 403(b) Plans.
This material is provided for general and educational purposes only, is not intended to provide legal or tax advice, and is not for use to avoid penalties that may be imposed under U.S. federal tax laws. OppenheimerFunds is not undertaking to provide impartial investment advice or to provide advice in a fiduciary capacity. Contact your attorney or other advisor regarding your specific legal, investment or tax situation.
These views represent the opinions of OppenheimerFunds and are not intended as investment advice or to predict or depict the performance of any investment. These views are as of the publication date, and are subject to change based on subsequent developments.