Truth 8 Withdrawal pains

Putting money into a traditional IRA is not a particularly difficult task. Uncle Sam, in fact, encourages you to save for your retirement by providing, in some circumstances, a tax deduction and tax deferral on the income earned by money invested in a traditional IRA. But when it comes to taking that money out before the magic age of 59 1/2, your rich uncle is much less cooperative. Withdrawals from a traditional IRA before you reach the age of 59 1/2 not only results in your having to pay income tax at ordinary income tax rates on the funds you withdraw, but in addition, you will be hit with a 10% excise tax as well.

Fortunately, there are loopholes.

Taking substantially equal yearly payments made over ...

Get The Truth About Protecting Your IRAs and 401(k)s now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.