Will you be penalized if you withdraw from an IRA if you are disabled?

Answer by  Chaneygirl (1755)

You can take money out of an IRA penalty free if you are disabled. Your disability must prevent you from any meaninful gainful employment. You should seek a physcian's advice as to if you can work or the duration of you disability if not permanent. Also, discuss with your investment company so the 1099-R can be coded correctly for disability.

Answer by  John (9008)

There are serious penalties and dire tax consequences for early withdrawal from an IRA. You may wish to explore getting a loan from your IRA, instead, which is usually cheaper.

Answer by  FinanceGuy (82)

Disability is one of the exceptions on the 10% penalty for IRA withdrawals before the age of 59 1/2. But, you will still have to pay income taxes.