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Early IRA Withdrawal Cost Her $2,000 for Waiting Five Months
Original: She Turned 59½ in August and Took a $20,000 IRA Withdrawal in March. Five Months Cost Her $2,000
A woman turned 59½ in August but took a $20,000 IRA withdrawal the previous March, five months too early, and paid a $2,000 early-distribution penalty as a result. The story is being cited as a cautionary example of how the 10% early withdrawal penalty on retirement accounts can be avoided simply by timing withdrawals after reaching age 59½, a rule many savers overlook.
Why now: It highlights a costly and easily avoidable mistake with retirement account withdrawal rules that resonates with savers.
Evidence
- She Turned 59½ in August and Took a $20,000 IRA Withdrawal in March. Five Months Cost Her $2,000 · 24/7 Wall St.
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