What's the penalty for withdrawing/closing an IRA early?

[codeyf]

Just curious. Could really use the $$, and I don't exactly have very much in there. Took such a big paycut since getting laid off last year, can't even afford to contribute anything, and haven't since last july.

 

[Jugernot]

I believe it depends on the fund.

EDIT: I'd contact you investment rep for exact details.

 

[AgentEL]

i think its somewhere around 10% early withdrawal fee and plus you pay taxes on it.

 

[mithrandir2001]

You have to pay income taxes on the withdrawl plus a 10% penalty. If you are in the 25% bracket, you would lose slightly more than 1/3 (35%) of your distribution amount.

Few financial advisors would recommend touching your IRA even for a financial emergency. You should place that money out of your mind. What you are experiencing now is a cyclical thin time but more than likely you will regain your financial footing in the future...recessions don't last forever. However if you tap your IRA that money is not going to be there for retirement and you are giving Uncle Sam a free 10%. I don't want to give Washington one more red cent than is necessary.

Where you should go to generate cash depends on what you "really" need. If you have enough money for rent/mortgage and food, the urgency to tap your retirement savings is significantly reduced.

 

[RU482]

DEATH