There are different options for early access to your US retirement funds. Learn how to do this without paying early withdrawal penalties.

Roth IRA Contributions

Roth IRA contributions may be withdrawn early without penalties or taxes. These contributions are made with after-tax dollars. Remember that any earnings may be subject to taxes and penalties. It is for withdrawals before 59½  years old. Exceptions apply.

Roth IRA Conversion

There is a holding period of five years for a Roth IRA. Conversion withdrawals from a traditional IRA to a Roth IRA are penalty-free. It is true for all ages. Conversion earnings are subject to taxes and penalties. It applies to withdrawals before 59½ years old. Exceptions apply.

Substantially Equal Periodic Payments (SEPP)

The IRS Rule 72(t) mentions substantially equal periodic payments (SEPP). Individuals may avoid paying early withdrawal penalty by deducting SEPP from their retirement accounts. The requirement is five years of payments or until 59½.

Qualified Reservist Distributions

Eligibility applies to members of the military reserves called to active duty. The minimum duration is 180 days. They can process penalty-free withdrawals from their 401(k) or IRA accounts. Active-duty distributions are covered.

First-Time Home Purchase

The first $10,000 in IRA earnings is eligible for penalty-free withdrawal for first-time home buyers. It covers the traditional and the Roth IRAs. It must be used within 120 days after withdrawal.

Higher Education Expenses

Pay for qualified higher education expenses with your IRA withdrawals. It remains without penalties. Listed below are the eligible individuals.

• The account owner
• Their spouse
• Their children, or
• Their grandchildren

Health Insurance Premiums

Pay your health insurance premiums with penalty-free IRA withdrawals. It is available to unemployed account owners. The minimum unemployment duration is 12 weeks. They should be receiving unemployment compensation.

Disability

Individuals who become permanently incapacitated may take funds from retirement accounts without penalty.

Check alternative income options first. Early withdrawal of your retirement funds can impact your retirement lifestyle. Consult with a financial advisor or tax professional to help you understand the effects of early withdrawals to your financial situation.