Anyone saving in a 401(k) or IRA knows that there are consequences if you withdraw the money before age 59 1/2. Not only will you be hit with an income tax bill on your fund distributions, you will also face an additional 10% penalty. This rule is to encourage people to keep their IRAs, 401(k)s and other qualified retirement plans in tact until retirement. But there are some exceptions.
That's right, there are certain times when you can take early distributions from an IRA or 401(k) without penalty. Find out more about these early 401(k) or IRA withdrawal penalty exemptions, how they work and who qualifies.