INDIVIDUAL RETIREMENT accounts, commonly known as IRAs, are retirement fund staples for many people. Traditional IRAs let workers take a tax deduction when they deposit money into their account and then pay taxes when they make a withdrawal.
It sounds straightforward, but exactly when you withdraw that money can make a big difference in how much you end up paying the government in taxes and fees.
Here are five things you should know before pulling money from your traditional IRA:
You could pay a penalty if you withdraw money too early.
You could miss a window for tax savings if you withdraw too late.
You are required to make minimum withdrawals from traditional IRAs once you reach age 72.
Your IRA withdrawals could affect your Medicare premiums.
You may be able to avoid an early withdraw penalty in certain circumstances.