Truth 5 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 your life expectancy ...