Yes, you can withdraw money from your IRA, but the IRS charges a penalty and taxes on most early withdrawals

You can take money out of your IRA at any time. The catch: if you withdraw before age 59½, the IRS typically charges a 10% early withdrawal penalty on top of regular income tax on the amount you take out. That means a $10,000 withdrawal might cost you $1,000 in penalty plus whatever your tax bracket adds on top. Some withdrawals avoid the penalty entirely, and a few avoid both penalty and tax—but those exceptions are narrow and have strict rules.

The type of IRA you have matters. A traditional IRA withdrawal is taxed as ordinary income, and you owe both penalty and tax on early withdrawals unless an exception applies. A Roth IRA works differently: you can withdraw the money you contributed (not the earnings) at any age without penalty or tax, because you already paid tax on that money when you put it in.

Key Takeaways

  • Early withdrawals from a traditional IRA before age 59½ trigger a 10% penalty plus income tax, unless a specific exception applies.
  • Roth IRA contributions can be withdrawn tax-free and penalty-free at any time, but earnings withdrawals before 59½ are penalized unless an exception applies.
  • The IRS recognizes specific hardship exceptions: disability, medical expenses over 7.5% of income, health insurance while unemployed, and a few others.
  • The CARES Act allowed penalty-free withdrawals of up to $100,000 from IRAs in 2020, but that window has closed.
  • You must report the withdrawal on your tax return; the IRA custodian sends you a Form 1099-R showing the amount withdrawn.

Withdrawals that avoid the 10% penalty

The IRS allows penalty-free early withdrawals in specific situations. You must meet the exact conditions—the IRS does not grant exceptions for hardship that falls outside these categories.

Disability: If you are legally disabled under Social Security rules, you can withdraw without penalty at any age. You will still owe income tax on the withdrawal from a traditional IRA.

Medical expenses: You can withdraw penalty-free (but not tax-free from a traditional IRA) if your unreimbursed medical expenses exceed 7.5% of your adjusted gross income for that year. The withdrawal must happen in the same year you incur the expenses or the year you pay them.

Health insurance while unemployed: If you lost your job and are collecting unemployment benefits, you can withdraw penalty-free to pay health insurance premiums—but only while you are receiving unemployment. Once the benefits end, this exception closes.

First-time home purchase: You can withdraw up to $10,000 lifetime (not per year) penalty-free from a traditional or Roth IRA to buy, build, or rebuild a first home. You must use the money within 120 days of withdrawal. This exception applies only once in your lifetime.

Education expenses: Withdrawals for may have access to education costs—tuition, fees, books, room and board for yourself or a dependent—avoid the penalty but not the tax on a traditional IRA.

Substantially equal periodic payments (SEPP): If you set up a formal payment schedule using IRS-approved calculations, you can withdraw penalty-free before 59½. The catch: you must follow the schedule for five years or until age 59½, whichever is longer. Breaking the schedule triggers penalties on all prior withdrawals.

How Roth IRA withdrawals work differently

A Roth IRA has two separate buckets: contributions (the money you put in) and earnings (the growth). You contributed after-tax dollars, so the IRS lets you pull out contributions at any time, at any age, with no penalty and no tax.

Earnings are different. If you withdraw earnings before age 59½ and before the account has been open for five years, you owe the 10% penalty plus income tax. If the account has been open for five years and you are 59½ or older, you can withdraw earnings tax-free and penalty-free.

Example: You opened a Roth IRA three years ago and contributed $5,000 per year ($15,000 total). The account grew to $18,000. You can withdraw the $15,000 in contributions anytime without penalty or tax. If you withdraw the $3,000 in earnings before age 59½, you owe penalty and tax on that $3,000.

The tax bill when you withdraw

When you withdraw from a traditional IRA, the IRA custodian (your bank, brokerage, or investment firm) withholds 10% for federal income tax automatically. That is not the same as your actual tax bill—it is just a down payment. You report the full withdrawal amount on your tax return, and your actual tax depends on your total income for the year.

If you withdraw $20,000, the custodian sends you $18,000 and withholds $2,000. But if you are in the 24% tax bracket, your actual tax bill on that $20,000 is $4,800. You owe an additional $2,800 when you file, plus the 10% penalty ($2,000) if no exception applies. The total cost: $4,800 in tax plus $2,000 in penalty.

You receive a Form 1099-R from the custodian showing the withdrawal amount. You must report this on your tax return even if you do not owe tax on it (for example, if you used a penalty-free exception). If you do not report it, the IRS will contact you.

How to request a withdrawal

Contact your IRA custodian—the bank, brokerage, or investment company that holds the account. They have a withdrawal form you fill out. You specify the amount, the date you want the money, and how you want it sent (check, direct deposit, or transfer to another account).

Most custodians process withdrawals within three to five business days. If the money is invested in stocks or mutual funds, the custodian sells those holdings first, which can add a day or two. If you need the money urgently, ask the custodian for the fastest option available.

If you are claiming a penalty-free exception, you may need to provide documentation. For medical expenses, keep receipts and calculate the percentage of your income. For disability, the custodian may ask for proof from Social Security. For unemployment-related withdrawals, have your unemployment benefits statement ready. Ask the custodian what they need before you submit the withdrawal request.

What happens if you withdraw and later change your mind

You can put the money back into an IRA within 60 days—this is called a rollover. If you return the full amount within 60 days, the withdrawal is treated as if it never happened: no tax, no penalty, no Form 1099-R. The money goes back into the same IRA or a different one.

If you miss the 60-day window, the withdrawal is permanent. You cannot undo it by depositing money later. The tax and penalty (if applicable) stand.

You are limited to one rollover per IRA per 12-month period. If you do multiple rollovers in a year, the second one is taxed as a withdrawal, even if you return it within 60 days. This rule changed in 2024, so if you did rollovers in prior years, those do not count against your current 12-month limit.

Frequently Asked Questions

Can I withdraw from my IRA to pay off credit card debt?

Yes, you can withdraw for any reason, but credit card debt does not may have access to for a penalty-free exception. You will owe the 10% penalty plus income tax on the full amount. A $10,000 withdrawal costs roughly $1,000 to $3,400 depending on your tax bracket, making it an expensive way to pay debt.

What if I need the money but do not want to withdraw?

Some IRAs allow loans against the balance. You borrow from your own account and repay it with interest over five years (or longer if the loan is for a first home purchase). The loan does not trigger a withdrawal, so no tax or penalty. Ask your custodian whether loans are available on your account type.

Do I have to withdraw a certain amount each year?

Not before age 73. Starting at 73, the IRS requires required minimum distributions (RMDs) from traditional IRAs based on your age and account balance. Roth IRAs have no RMD requirement during your lifetime. If you do not take the RMD, the IRS charges a 25% penalty on the amount you should have withdrawn (reduced to 10% if you correct it within two years).

If I withdraw from my IRA, does it affect my Social Security or Medicare?

IRA withdrawals do not count as income for Social Security purposes, so they do not reduce your benefits. They do count as income for Medicare premium calculations (IRMAA), which means a large withdrawal could increase your Part B and Part D premiums. Check with Medicare before a large withdrawal if you are on Medicare.

Can my creditors take money from my IRA?

IRAs have strong creditor protection in bankruptcy. In most cases, creditors cannot seize IRA funds even if you owe them money. The protection is not absolute—it varies by state and by the type of debt—but it is one reason IRAs are considered safer than regular savings accounts for long-term storage.