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How to crack open your IRA without triggering a tax penalty

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When IRA withdrawals are penalty-free
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When IRA withdrawals are penalty-free | amelaxa/Shutterstock.com

When IRA withdrawals are penalty-free

You've been saving diligently in an IRA for your retirement, but now you need some of that cash to cover today's expenses. Can you get to it without incurring Uncle Sam's tax wrath? In some instances, the answer is yes.

The IRS generally considers IRA withdrawals made before you reach age 59 1/2 as premature distributions. In addition to owing any tax that might be due on the money, you could face a 10 percent penalty on the amount.

But there are times when the IRS says it's OK to use your retirement savings early.

And while in these cases you'll avoid penalties for taking out your retirement money early, you'll still owe taxes due on the withdrawn funds.

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