Withdrawing Retirement Funds and Minimize the Penalties

1. Receive the payments as a series of substantially equal periodic payments over your estimated lifespan. These payments are required to be made at least annually. If these payments are coming from a qualified employee plan, they can only be made after you have left the job.
2. If your unfortunately have excessive out-of-pocket medical expenses one year and those expenses are greater than 7.5% of your adjusted gross income (agi), you can withdraw money from those retirement plans without paying the normal penalty.
3. You can also avoid a penalty for an IRA distribution for first-time home purchases. It is important to understand however what the government’s definition of a “first time” home buyer is.
4. You are allowed IRA distributions if you are unemployed for more than 12 weeks without subject to the 10% penalty if they payment is for health insurance premiums.