Withdrawing From Your IRA Without Penalties

Most people know that withdrawing from your traditional IRA early is a big blunder.  However, there are a few ways to withdraw from your IRA without triggering the 1-% penalty:

1. Required Minimum Distribution. Section 72(t) of the IRC allows individuals under 59 ½ to withdraw from their IRA and avoid the penalties by taking a Series of Substantially Equal Periodic Payments, which are designated to liquidate the account over a life expectancy period. 
2. Fixed Amortization Method. Under SOSEPP method is fixed amortization in which your equal payment is based on one of three life expectancy tables published by the IRS.
3. Fixed Annuitization Method. This method uses an annuitization factor published by the IRS to determine your equal payments.
4. Higher Education Expenses. Individuals can withdraw from their IRA if they are using the money to help pay for college and higher education expenses.
5. Disability. If you are “totally and permanently disabled,” you can take distributions from your IRA sans penalty.
6. Death. If you die your beneficiaries can take distributions from your IRA.
7. Medical Expenses. If you have high, unreimbursed medical expenses, you are allowed to withdraw a limited amount without penalty.
8. Medical Insurance Premiums. You are able to withdraw an amount to pay for medical insurance premiums if you have lost your job and receive unemployment compensation. 
9. First Time Home Purchase. You are allowed to withdraw up to $10,000 for the costs associated with a first home without penalty.
10. Qualified Reservist. If you served after September 11, 2001 for at least six months, then you may make a withdrawal from your IRA during your active duty period.
11. Divorce. Private Letter Rulings have allowed divorced parties to divide an IRA into two separate IRAs.
12. Roth IRA Conversion. When you convert your Traditional IRA to a Roth IRA there is no 10% penalty.
13. Rollover. You can have access to your funds without penalty as long as your IRA rollover is completed within 60 days.
14. Investment Advisor Fees. You have the ability to authorize your custodian to pay your financial advisor or investment manager from your IRA funds any fees for managing your IRA.
15. Periodic Temporary “Relief” Provisions. Occasionally Congress will enact special legislation allowing individuals impacted by natural disasters to access IRA funds without paying the 10% penalty.

See 15 Ways To Withdraw From Your IRA Without Penalty, Forbes, 2014.