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I read some where that funds withdrawn from an IRA account can be withdrawn without any penalties as long as the money was used to purchase a home or to pay for education. Am I correct on this?
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Yep, generally.
Take a gander at the instructions for Form 5329, and also IRS Publications 590 and 575 for the details. Distributions made for higher education purposes; and also distributions (up to $10,000) for the purchase of a first home . Both exceptions to the 10% early distribution penalty apply to IRAs only -- and not 401k plans, etc. You'd just have to pay the regular tax on the distribution.
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