IRA Early Withdrawal Penalties: Key Rules to Know

March 2, 2026

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What we’ll cover:

Taking money out too soon from your IRAs can trigger a penalty and taxes.
Generally, taking money out of your IRAs before the age of 59½ is considered an “early distribution,” which is subject to a penalty unless an exception applies.
If you’re thinking about making an early withdrawal, consult a tax professional who can help you understand the potential tax implications.

Note: All tax information contained in this article is as of the publication date. Be aware that tax rules are always subject to change, and the IRS website is your official source for the latest forms and guidance.

In an ideal world, the money you put into an IRA would stay invested in the account until you’re ready to use it in retirement. But life happens, and you might find yourself in a situation where you need to make an early withdrawal.

Before you dip into your retirement funds, however, you’ll want to familiarize yourself with the IRS rules regarding early distributions (withdrawals). Taking money out too soon (before age 59½) could trigger a 10% early withdrawal penalty and potential taxes.

What is an early distribution? Key rules to know

Generally, taking money out of your IRAs before the age of 59½ is considered an “early distribution,” which is subject to a penalty unless an exception applies.

Traditional IRA. Generally, you have to pay a 10% penalty for early distributions, as well as income taxes on the money you take out.

However, the IRS does provide a few exceptions for early withdrawals. For example, you may not have to pay the 10% penalty if one of these conditions apply:

You are totally and permanently disabled.
You are terminally ill.
You are the beneficiary of a deceased IRA owner.
You use the distributions to buy, build, or rebuild a first home.
The distribution is for your qualified higher education expenses.

For the full list of exceptions and more information on traditional IRA withdrawal rules, see IRS Publication 590-B. You may also want to consult a professional tax advisor to understand what rules may be applicable for your personal situation.

Roth IRA. Many people often forget this important detail about Roth IRAs: You can withdraw your contributions anytime from your Roth account tax-free and penalty-free.

But if you take an early distribution from your account earnings, the distribution may be subject to taxes and a 10% penalty—unless it’s a qualified distribution.

Qualified distributions from Roth IRAs are tax- and penalty-free if you meet specific conditions.

For example, if you’ve had the Roth account for at least five years (from when you made your first contribution), a withdrawal is considered to be a qualified distribution if you meet one of the following conditions:

You’re age 59½ or older.
You’re totally and permanently disabled.
You use the funds to make a qualified first-time home purchase (up to $10,000 lifetime limit).
The funds are distributed to your beneficiary or estate as a result of your death.

For the full list of exceptions and more details on Roth IRA distribution rules, see IRS Publication 590-B.

Read more: Traditional vs. Roth IRAs

IRAs are designed to help you save for retirement

You may be wondering why there are strict rules regarding early withdrawals. Keep in mind that IRAs and other retirement accounts are designed to help you save for retirement. These rules are a way of discouraging you from taking money out of your accounts arbitrarily.

If you’re thinking about tapping into your retirement accounts early, it’s a good idea to consult your financial advisor or a tax professional who can help you understand which rules may apply to you and their tax implications.

This article is for informational purposes only and is not a substitute for individualized professional tax advice. Individuals should consult their own tax advisor for matters specific to their own taxes. This article was prepared by and approved by Marcus by Goldman Sachs, but does not reflect the institutional opinions of The Goldman Sachs Group, Inc., Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates, subsidiaries or divisions. Goldman Sachs Bank USA and Goldman Sachs & Co. LLC are not providing any financial, economic, legal, accounting, tax or other recommendations in this article. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice. Information contained in this article does not constitute the provision of investment advice by Goldman Sachs Bank USA, Goldman Sachs & Co. LLC or any of their affiliates. Neither Goldman Sachs Bank USA, Goldman Sachs & Co. LLC nor any of their affiliates makes any representations or warranties, express or implied, as to the accuracy or completeness of the statements of any information contained in this document and any liability therefore is expressly disclaimed. You are not permitted to publish, transmit, or otherwise reproduce this information, in whole or in part, in any format without the express written consent of Goldman Sachs. This foregoing restriction includes, without limitation, using, extracting, downloading or retrieving this information, in whole or in part, to train or finetune a machine learning or artificial intelligence system.