IRA early withdrawal FAQs

Can I take 72t distributions from a Roth IRA, making Roth IRA early withdrawal?

72t distributions can be taken from Roth IRAs in essentially the same manner as Traditional IRAs.

However, since Roth IRA contributions can be withdrawn without incurring any taxes or penalties and Roth IRA distributions are always treated as consisting first of contributions, this strategy need only be used for a Roth IRA if you are under 59¹/2. and want to withdraw earnings after exhausting contributions.

May I aggregate the value of two or more IRAs for IRA early withdrawal purposes or 72t distributions?

Yes.

The IRS allows taxpayers to aggregate two or more IRAs to calculate 72t distributions while taking the entire distribution from just one IRA.

If I have several IRAs, do I have to apply the 72t calculations to all of them?

No.

You can choose to take 72t distributions from one IRA account and leave the funds in your other IRAs untouched.

Moreover, once you have embarked on a 72t distribution schedule from one IRA, you can elect to start another distribution schedule from another IRA at any time.

Can I stop receiving IRA distributions before the required period?

You may stop your 72t distributions at any time.

However, if 72t distributions are modified before the end of the required payment period, you will owe a 10% penalty tax, plus interest, on all distributions received before the age of 59½.

If you don’t need all of the money being distributed to you, you cannot put the distributions back into your IRA.

You can, however, continue to make contributions, based on earned income, to an IRA, other than the IRA from which you are receiving 72t distributions.