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IRA distributions may begin once you reach 59½ years of
age. With a traditional IRA, you must begin taking distributions
by age 70½, but with a Roth IRA there is no minimum age requirement.
With either IRA, you may incur penalties or be compelled to pay
income tax, if you withdraw money before the age of 59½.
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Traditional
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Roth
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CESA
|
| Age
70½ Required Minimum Distributions |
| Yes |
No |
No |
| Tax
Free Qualified Distributions |
|
None
|
Age 59½
Death
Disability
1st-time homebuyer after 5-year period
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Qualified education expenses
|
| Some
Distributions may be Taxable but Avoid 10% Penalty |
|
Over age 59½
If you are under age 59½, penalty free
distributions for Death, Disability, Education or 1st
time homebuyer
|
Over age 59½
If you are under age 59½, penalty free
distributions for Death, Disability, Education or 1st
time homebuyer. Taxable if you're under 59½ and
the IRA has been held less than 5 years.
|
Death Benefit
Disability Benefit
Receipt of Scholarship |
| Taxation
Issues for Distributions |
|
Earnings and deductible contributions are taxable
Non-deductible contributions are not taxable
Distributions are a ratio of deductible and nondeductible
amounts
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Earnings withdrawn for non-qualified reasons are taxable
Contributions are not taxed when withdrawn
Withdrawals are considered to be the return of contributions
first, then earnings
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Earnings withdrawn for non-qualified reasons are taxable
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