5 Exceptions to the IRA 10% Penalty for Early Distributions

Here are 5 exceptions to the 10% Penalty for Early Withdrawals I’ve come up with after sourcing through the documentation provided by the IRS on IRA’s. Take advantage of these only if you have to, taking money out of your retirement is serious business.

Medical Insurance

That’s right! You can take out an early distribution to buy medical insurance! There are some stipulations though. They are:

  1. You’ve lost your job.
  2. You’ve received unemployment for 12 consecutive weeks because you lost your job.
  3. You’ve receive the IRA distributions during the year you received unemployment or the following year.
  4. You’ve receive distributions no later than 60 days after you’ve been re-employed.


If you are disabled then you don’t have to worry the 10% penalty. All you need to do is make sure that you file a special tax form when doing your taxes to make sure uncle sam knows you qualify.

College Tuition

Your IRA money can be withdrawn penalty free to help pay for your college tuition as long as your withdrawn amount is not higher than your qualified college tuition.

Building or Buying Your First Home

As long as the home is your first home then the money is penalty free. There is no exception to this exception; it has to be your first home.


Had a past relative leave you an IRA? Then no worries over a penalty! Grab your cash and go, though I’d recommend you leave a healthy amount right where it’s at!

There you have it! 5 exceptions to the 10% penalty you may be able to take advantage of to make life a little easier on you. I hope your able to put this information to good use.

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