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If I make early withdrawls from my i.r.a. before retirement age I realize I must pay the 10 percent penalty plus tax but would i then be charged with an aditional income tax on the amount taken out? how many taxes would be due on this early withdrawl? im thinking about early retirement and wondering how much uncle sam is going to eat up out of my withdrawls?? is there a way you can make withdrawls from your ira without all these taxes and penalties? im in my 40's and dont want to wait till 59 for the money..thanks!
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im thinking about early retirement and wondering how much uncle
sam is going to eat up out of my withdrawls??


Hi spliter1,

Have you visited the Retire Early message board? The Fools on that board have had some great discussions about how to handle IRA withdrawals for those who retire before age 59 1/2.

http://boards.fool.com/Messages.asp?id=1380025000000000


Jeanie
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<< If I make early withdrawls from my i.r.a. before retirement age I realize I must pay the 10 percent penalty plus tax but would i then be charged with an aditional income tax on the amount taken out? how many taxes would be due on this early withdrawl? >>

You need to do some basic reading about how IRAs work. I suggest the excellent IRA section of this board's FAQ. Among other things, you will find there that distributions from traditional IRAs are ordinary income, except for the return of previously-taxed contributions, and that there is a way to avoid the 10% penalty if you retire early.

Phil Marti
Tax Preparer
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