Finance Question Answered
Finance Question Answered
Answered by: Arin Goldman
Vivian asked the question:
“Does one have to be retired to remove money without penalty from an IRA, 401K, 403B etc at age 59 1/2?”
Arin’s answer to Vivian’s question:
Once you reach age 59 1/2 you can start taking money out of your IRA or 401K in any amount you want. Keep in mind that you’ll owe tax on the amount you withdraw from a traditional account. The amount that you withdraw will be added to your other income and you will pay taxes based on your total income. With a Roth, there’s no tax at all provided your account has been open at least five years and you’re 59 1/2. Most advisors recommend that you hold off witdrawing funds from your retirement accounts until you’ve actually retired because at that point you will presumably be paying taxes at a lower rate and because you probably will need your retirement funds to last as long as possible. I recommend that you check with your financial advisor and/or accountant to make sure that withdrawing funds makes sense for you.
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