Early withdrawals from an IRA

Traditional, Rollover, or SEP IRA

In many cases, you'll have to pay federal and state taxes on your early withdrawal, plus a possible 10% tax penalty.

Before age 59½, the IRS considers your withdrawal (also called a "distribution") from these IRA types as an early withdrawal, triggering a possible tax penalty.

Taxes and penalties

In many cases, you'll have to pay federal and state taxes on your early withdrawal, plus a possible 10% tax penalty.

Exception

You may be able to avoid the 10% tax penalty if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death, disability or terminal illness
• For health insurance (if you are unemployed)
• Some medical expenses

Withdrawal options

Withdrawals can be initiated online using the "Withdraw from your IRA" button, with your choice of how to receive the money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). Link your bank nowLog In Required
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)

Roth IRA

A Roth IRA allows you to withdraw your contributions at any time—for any reason—without penalty or taxes.

For example: If you contributed $12,000 over 2 years and your Roth IRA has grown to $13,200, you can take out the original $12,000 without taxes and penalties. However, the $1,200 of growth would incur taxes and penalties unless your Roth is 5 years old AND you meet the requirements of a qualified withdrawal.

Roth conversions are also eligible to be withdrawn without penalty or taxes, as long as they have been in your Roth for 5 years. Keep in mind, if you have done more than one conversion, each one has to satisfy its own 5 year aging period.

Qualified Roth withdrawals

"Qualified" withdrawals (also called "qualified distributions") from a Roth means you get your money tax free and penalty free. For your withdrawal to be considered qualified, you must:

• own your Roth for 5 years AND
  withdraw under one of the following circumstances:
• Age 59½
• First-time home purchase (up to $10,000)
• Disability
• Death

Non-qualified Roth withdrawals

If you don't meet the requirements of a qualified withdrawal above, your Roth money would be withdrawn from your account in the following order:

1. Contributions
2. Conversions
3. Earnings

Taxes and penalties

In many cases, you'll have to pay taxes plus a 10% penalty on your earnings. An early withdrawal of a Roth conversion could also be subject to a 10% recapture penalty, if it has not met the required 5 year aging period in your Roth IRA.

Exceptions

You may be able to avoid the 10% tax penalty if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death, disability or terminal illness
• For health insurance (if you are unemployed)
• Some medical expenses

Withdrawal options

Withdrawals can be initiated online using the "Withdraw from your IRA" button, with your choice of how to receive the money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). Link your bank nowLog In Required
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)

When you take a withdrawal from a SIMPLE IRA before age 59½, the IRS considers your withdrawal an early distribution.

Taxes and penalties

In many cases, you'll have to pay federal and state taxes on your early withdrawal. There may also be a 10% tax penalty. A higher 25% penalty may apply if you take a withdrawal from your SIMPLE within 2 years of your first contribution.

Exceptions

You may be able to avoid the 10% and 25% tax penalties if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death, disability or terminal illness
• For health insurance (if you are unemployed)
• Some medical expenses

Withdrawal options

Withdrawals from a SIMPLE IRA can be initiated using our separate form (PDF) or by calling us for assistance at 800-343-3548. You'll have the following choices of how to receive your money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). EFT Form (PDF)
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)