2008 IRA Contribution Limits & Rules

2008 IRA Distribution

Distributions from an IRA are governed by various IRS rules and regulations primarily relating to your age at the time of withdrawal. Penalty-free IRA distributions are optional starting at age 59 1/2 but are mandatory once you reach 70 1/2. Withdrawals from an IRA if you are under 59 1/2 are subject to a 10 % early withdrawal penalty. Regardless of your age, distributions for an IRA are subject to income taxes in the year you make the withdrawal.

Between age 59 1/2 and 70 1/2, distributions are optional and can be in any amount. At age 70 1/2, however, distributions are mandatory and you have to make the required minimum distribution (RMD) amounts mandated by the IRS. Failure to make the RMD will subject you to penalties.

There are few exceptions under which you can make penalty free withdrawals from an IRA if you are under 59 1/2. These include: a purchase of a first home, expenses for higher education, certain medical expenses or death.

Disclaimer: This website is intended to provide general information about IRA retirement plans. Nothing on this site should be considered legal, financial or tax advice. Please consult your tax or financial advisor for professional advice. While we strive to periodically update the information on this website, 2008ira.com makes no representation or warranties as to the accuracy, reliability, or completeness of any information on this site.