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Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 79106  
Subject: Re: IRAs for Education Date: 1/20/1998 9:25 AM
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Greetings, Dhrz, and welcome.

<<Last week it was indicated that, as of Jan 1, money could be withdrawn from an IRA for educational purposes without penalty. Does this mean from an IRA established this year (1998)? Or can I withdraw from an IRA established and funded for 1997?>>

It makes no difference if the IRA was funded with money in 1988 or whenever. The IRA may be tapped without penalty under age 59 ½ to pay for qualified educational expenses, but money withdrawn for that purpose is subject to ordinary taxation. Qualifying educational expenses include tuition, fees, books, supplies, room and board, and equipment. A word of caution on these withdrawals is in order, though. If the withdrawal exceeds the educational expenses, the excess will be assessed the 10% penalty. Therefore, you should withdraw only the amount needed to pay those expenses.

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