Withdrawing money from your Monorail IRA before age 59½ may lead to income taxes and an additional 10% early withdrawal penalty, depending on your circumstances.
These rules are established by the IRS and apply to most traditional and Roth IRA withdrawals made before retirement age.
💸 When Is the 10% Penalty Applied?
If you take a distribution before age 59½, the IRS may apply:
Ordinary income tax on the withdrawn amount
An additional 10% early withdrawal penalty
✅ Exceptions to the 10% Penalty
Certain early withdrawals may be penalty-free, including:
First-time home purchase (up to $10,000)
Qualified education expenses
Unreimbursed medical expenses
Health insurance premiums after job loss
Permanent disability
Childbirth or adoption expenses
IRS levy on your account
See the full list of exceptions here:
🔗 IRS: Exceptions to Tax on Early Distributions