IRA Rules

The IRA Rules Blog

Nowadays, more and more people are investing in their retirement plans whether it will be in their employer’s 401k retirement plans, 403b retirement plans, profit sharing, or Individual retirement plans (IRAs). By interviewing people from different professions and from different states and talking to financial advisors, we have compiled lists of frequently asked questions about Individual retirement accounts or IRAs.

Rules regarding individual retirement plans change often and it is important to keep up with the IRA rules so that you can fully create your financial plan. For example, people need to know when they can withdraw money from their IRA accounts without tax or penalty before they retire or before they are 59 1/2. There are exceptions to most rules, including IRA rules – you just need to know what they are.

The IRA Rules website is dedicated to bringing you all of the answers to your Individual retirement plans or IRA questions, including:

• an overview of all the IRA Rules,
• Roth IRA rules, Roth IRA tax rules, and torh IRA withdrawal rules
• IRA withdrawal rules and early withdrawal of IRA account penalties,
• IRA distribution rules
• stretch IRA rules
• simple IRA rules and SEP IRA rules
• Traditional IRA rules
• eligibilities of individual retirement accounts, and
• requirements to open IRA accounts.

We discuss:

• Traditional IRA rules,
• Roth IRA rules and
• IRA Rollover rules, and
• SEP IRA rules.

We also go into more details in various frequently asked questions about ira rules such as:

• life expectancy,
• Required Minimum Distribution (RMD), and
• Required Death Distributions.
• This website also discusses Stretched out IRA.

If you are specifically looking for information on a specific type of IRA, you may want to visit websites dedicated for particular type of IRA listed on the left hand side and right hand side menus.

Even if you cannot find an answer already published on the site or any other related sites suggested here, simply use our contact form and ask us any IRA questions you might have. To begin your exploration of this site, simply click on one of the menu items to continue.

Question: Roth IRA early withdrawal rules?

I know that a 401k or a traditional IRA because your contributing portion of your gross income or tax deductible dollars, if you were to access it before the age of 59 and 1/2 you will face 10% penalty + taxes. For a Roth IRA, since your contributing your after tax dollars, if you tap into it earlier than age 59 and 1/2 will you face only the 10% penalty? or still both 10% penalty + taxes?

Answer: Wayne Z’s got it right.

Contributions can be removed, anytime (despite what you read from other responders on Y!A), without tax or penalties. The ordering rules for Roth withdrawals is contributions first. Taxes and penalties apply ONLY to earnings, if any.The 5-year holding period begins on Jan 1 of the year to which your first Roth contribution applies. You need only satisfy it once.

Each conversion, however, has its own 5-yr holding period.

Hope that answers your question and earns your Best Answer vote!

DISCLAIMER FOR PROFESSIONALS: While the information in this response was obtained from sources believed to be reliable, its accuracy and completeness cannot be guaranteed. The opinion voiced in this answer is for general information only and it shall not be construed as tax, legal, or investment advice for any individual. Questioners are urged to consult with their professional advisers before making any decisions regarding their finances.

Retirement Guru, CFP®, EA, BCE, CFS, AAMS
Certified Financial Planner™ Practitioner
Enrolled Agent | Admitted to Practice before the IRS

‘Providing sound Retirement and Estate Planning Strategies since 1985′
Source(s):
One of only 1,691 professionals in the country who holds both the CFP and EA designations (CFP Board: July 2009). In practice over 26 years

Think…..”Roth IRA”

Question: How do I use my IRA to help buy my first home?

I know you can withdrawal money from an IRA for a first home purchase and related costs without the early withdrawal penalty, but how and when? I can’t find any details on the web other than you can do it and the money has to be used within 120 days of withdrawal.

Answer: See IRS Form 5329 and instructions. That is where you account for exceptions to 10% penalty. Just be prepared to back it up if audited.

Note that you will still owe income tax on the distribution.

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