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What if I need the money in my IRA before retirement?

If you withdraw money from a traditional IRA before you turn 59 ½, you must pay a 10% tax penalty (with a few exceptions). The same rule applies if you withdraw investment earnings from a Roth IRA. The exceptions involve cases in which you use the withdrawal to pay for college expenses, to buy your first home (up to $10,000) or for medical expenses greater than 7.5% of your AGI (adjusted gross income), or in case of disability. For more, see Can I take money from my IRA without penalty?