These Exceptions Allow You to Withdraw Retirement Money Early, Penalty Free

Retirement funds are appealing because you can save money before taxes. The downside is, if you withdraw early, you typically have to pay a penalty. However, there are some occasions where you avoid this.

Reddit user dequeued explains several situations in which you can withdraw money before the age of 59 and a half. Some merely allow you to pull out funds a couple years early, however, you can make major withdrawals from certain types of accounts for things like buying a house, education, or difficult medical expenses:

I often see people who are interested in early retirement putting most of their retirement savings into taxable accounts because they believe IRAs, 401(k) plans, and other tax-advantaged accounts “lock up” their money until they are 59½. If you are interested in retiring before 59½, this is one of the worst mistakes you can make.

It’s a mistake because the premise isn’t true at all. There are many ways you can get access to retirement funds before age 59½ and all without that horrible 10% penalty for early withdrawals.

You can check out the post below for a list of several of the exceptions. The options available to you may depend on what type of retirement account you’ve chosen. Of course, taking money out of your retirement account isn’t something you want to do lightly anyway, but if you ever have a pressing need to, it’s helpful to know what your options are.

PSA: Retirement funds are not locked up until age 59½ | Reddit

Photo by 401(k) Calculator.

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