You can withdraw from an IRA, but the rules depend on your age and the type of account

Yes, you can take money out of an IRA before you turn 59½, but the IRS charges a 10% early withdrawal penalty on top of income tax on the amount you withdraw. The penalty applies to both traditional IRAs and Roth IRAs, with a few exceptions. If you wait until 59½ or older, you can withdraw without the penalty—though you still owe income tax on traditional IRA withdrawals (Roth withdrawals of contributions are tax-free).

The key difference between IRA types matters here. With a traditional IRA, you pay income tax on withdrawals at any age. With a Roth IRA, you can withdraw the money you contributed (not the earnings) tax-free and penalty-free at any time, but earnings are locked until 59½ unless an exception applies.

Key Takeaways

  • Withdrawals before age 59½ trigger a 10% IRS penalty plus income tax, except in specific situations like disability, medical expenses, or first-time home purchase.
  • Roth IRA contributions can be withdrawn anytime without penalty or tax, but earnings are restricted until age 59½.
  • Traditional IRA withdrawals are always taxed as income, regardless of your age, and the 10% penalty applies to early withdrawals unless an exception fits.
  • The IRS requires you to report all IRA withdrawals on your tax return, and your bank or IRA custodian will send you a Form 1099-R documenting the amount.
  • Some withdrawals—like those for a first-time home purchase or may have access to education expenses—avoid the 10% penalty but still owe income tax.

Exceptions to the 10% early withdrawal penalty

The IRS allows you to withdraw from an IRA before 59½ without the 10% penalty in specific situations. These include disability, medical expenses that exceed 7.5% of your adjusted gross income, health insurance premiums while unemployed, and a first-time home purchase (up to $10,000 lifetime). You can also withdraw to pay may have access to education expenses for yourself or a family member, or to cover an IRS levy against your account.

Another exception is the Substantially Equal Periodic Payment (SEPP) rule, also called Rule 72(t). This allows you to take regular withdrawals before 59½ without the penalty, as long as you follow a specific formula and continue the payments for at least five years or until you turn 59½, whichever is longer. The amount you can withdraw each year is calculated using IRS life expectancy tables, and changing the payment schedule before the five-year period ends triggers the penalty retroactively on all prior withdrawals.

Even when an exception applies, you still owe income tax on the withdrawal. The 10% penalty is what gets waived, not the tax itself.

How Roth and traditional IRA withdrawals work differently

A Roth IRA lets you withdraw contributions (the money you put in) anytime, tax-free and penalty-free. The earnings on those contributions stay locked until you turn 59½ or meet an exception. This matters because if you contributed $5,000 per year for five years and your account grew to $30,000, you can withdraw the $25,000 in contributions without penalty, but the $5,000 in earnings is restricted.

A traditional IRA works the opposite way. You cannot separate contributions from earnings—every dollar you withdraw is treated as taxable income. If you contributed $25,000 and your account is now $30,000, a $10,000 withdrawal counts as $10,000 of taxable income. You owe income tax on the full amount, plus the 10% penalty if you are under 59½ and no exception applies.

If you have both a traditional and Roth IRA, the IRS treats them as one account for withdrawal purposes. This means if you withdraw from a Roth, the IRS calculates how much of your total IRA balance is contributions versus earnings, and applies that ratio to your withdrawal. This can create unexpected tax bills if you have a large traditional IRA balance.

Required minimum distributions at age 73

Once you turn 73, the IRS requires you to withdraw a minimum amount from traditional IRAs each year, called a Required Minimum Distribution (RMD). The amount is calculated by dividing your account balance by a life expectancy factor published by the IRS. 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).

Roth IRAs do not require distributions during your lifetime—you can leave the money untouched. However, your beneficiaries will face distribution rules after you die.

You can withdraw more than the RMD without penalty, and the excess counts toward next year's requirement. Some people use this to manage their tax bracket by taking larger withdrawals in lower-income years.

What happens when you withdraw: taxes and reporting

When you withdraw from an IRA, your custodian (the bank, brokerage, or fund company holding the account) will send you a Form 1099-R by January 31 of the following year. This form reports the gross withdrawal amount and whether the 10% penalty applies. You must include this on your tax return when you file.

If the 10% penalty applies, it shows up on Form 1099-R as "Code 10" in box 7. If an exception applies and the penalty is waived, the form may show a different code. You are responsible for reporting the exception on your tax return (usually Form 5329) to avoid paying the penalty when you file.

The withdrawal is added to your income for the year, which can push you into a higher tax bracket or affect other tax benefits like the child tax credit or education credits. Some people spread large withdrawals across multiple years to manage the tax impact.

How to request a withdrawal from your IRA

Contact your IRA custodian directly—call the number on your statement or log into your account online. Most custodians let you request a withdrawal through their website or by phone. You will need to specify the amount and how you want it delivered (check, electronic transfer, or rollover to another account).

The custodian will ask whether you want them to withhold taxes from the withdrawal. If you do not request withholding, you will owe the full tax bill when you file your return. Many people choose to have 10% to 20% withheld to cover at least part of the tax liability, though this is optional.

Processing typically takes three to five business days for electronic transfers, longer for checks. If you are under 59½ and claiming an exception to the penalty, keep documentation of that exception (medical bills, disability letter, first-time home buyer status) in case the IRS questions your withdrawal later.

Rollovers and transfers as alternatives to withdrawals

If you need access to IRA money but want to avoid taxes and penalties, a rollover or direct transfer to another retirement account may work. A rollover means you withdraw the money and deposit it into another IRA or may be able to access retirement plan (like a 401(k)) within 60 days. You can do one rollover per IRA per year, and as long as you complete it within 60 days, there is no tax or penalty.

A direct transfer (also called a trustee-to-trustee transfer) moves money straight from one custodian to another without you touching it. This avoids the 60-day window and the one-rollover-per-year limit. If you are moving money between IRAs or from an IRA to a 401(k), a direct transfer is usually the cleanest option.

These options do not give you access to the cash—the money stays in a retirement account. But they let you move it without triggering a taxable event, which can be useful if you are consolidating accounts or switching custodians.

Frequently Asked Questions

What happens if I withdraw from my IRA and do not report it on my taxes?

The IRS will catch it. Your custodian reports the withdrawal on Form 1099-R, which the IRS receives automatically. If you do not report it, the IRS will send you a notice and bill you for the tax plus interest and penalties. If you claimed an exception to the 10% penalty but did not document it, you will owe the penalty too.

Can I withdraw from my IRA to pay off debt or buy a car?

You can withdraw for any reason, but you will owe income tax plus the 10% penalty unless an exception applies. Debt and car purchases do not may have access to as exceptions. The tax and penalty can easily be 30% to 40% of the withdrawal, making it an expensive way to borrow money.

If I withdraw from my Roth IRA, can I put the money back?

You can contribute to a Roth IRA in future years, but you cannot "undo" a withdrawal. The money you took out counts against your lifetime contribution limit. If you withdraw $5,000 and want to put it back, you can contribute $5,000 in a future year, but that uses up your contribution room for that year.

Do I have to withdraw from my IRA if I need money for a medical emergency?

You can withdraw without the 10% penalty if the medical expenses exceed 7.5% of your adjusted gross income. However, you still owe income tax on the withdrawal. If the expenses do not meet that threshold, the 10% penalty applies. This is one reason people keep an emergency fund outside retirement accounts.

What if I am disabled—can I withdraw without penalty?

Yes. If you are receiving Social Security Disability Insurance (SSDI) or have been deemed disabled by the IRS, you can withdraw from your IRA before 59½ without the 10% penalty. You still owe income tax. You will need to provide proof of disability status to your custodian or report the exception on your tax return.