Withdrawing from IRA without incurring penalty

[Zack240]

You can start withdrawing from your traditional IRA without penalty starting at the age of 59 ½. Of course, you don’t have to start withdrawing at this age. You can wait until you retire at the age of 62, 65, 68, etc. However, you must start withdrawing from your traditional IRA by April 1 of the year following the year you reach 70 ½. Starting at age 70 ½, the owner of the account is forced to make withdrawals from the account. If you do not make a withdrawal when required to, the IRS may confiscate half the amount of that withdrawal.

 

[Mr. H.]

During the years that I worked as a substitute teacher, I was denied the ability to make tax-deductible contributions to my IRA using funds from my salaried job.

Why? Because a small portion of my paycheck from the schools went into the SURS, or "State Universities Retirement System".

Which is a "qualified pension plan".

So, while SURS took $80 per year and put it into their fund, I could not contribute $2,500 tax free to my IRA.

True story.