Joel wrote:Where are you guys finding that there is no fee to withdraw contributions or that you can pull money from your IRA almost immediately, with no penalties of fees?
Are we all talking about a Roth-IRA like I was originally discussing?
Just to clarify - smallLife is correct in that there are no taxes/penalties for withdrawing CONTRIBUTIONS from a Roth IRA --- only on the EARNINGS. This is why people use it for all kinds of things, like emergency fund or savings for kids college. This is also why it is an excellent tool for early retirees, because it can be leveraged prior to being qualified for 401K or traditional IRAs. You've already paid the taxes on the contributions and can take it out anytime -- you just have to meet the qualifications to withdraw earnings tax/penalty free.
The earlier post on "72(t) Substantially Equivalent Periodic Payment" is misleading in that it is not specific to withdrawal of contributions from a ROTH IRA plan.
**below is an example of advice related to ROTH IRA withdrawal - you will find all kinds of advice by search for ROTH IRA early withdrawal or something like that.
Order of Roth IRA Distributions
The IRS makes it easier for taxpayers to make penalty free withdrawals from their accounts by the way they assign the order of IRA withdrawals. Again, referring to IRS Publication 590, Roth IRA distributions occur in the following order:
1. Regular contributions.
2. Conversion and rollover contributions, on a first-in first-out basis.
3. Earnings on contributions.
As you can see, regular contributions are the first to be withdrawn, and they can be withdrawn at any time without taxes or penalties. The taxable portion of your withdrawals is held until the end, making it easier for you to make a penalty free withdrawal.