Angry Male posted:

- quote -

You can avoid the penalty under specified conditions, such
as "unreimbursed medical expenses that are more than 7.5% of
your AGI" or if you are disabled, or buying/building your
*first* home, and a number of others (See Pub 590).

However, for the purpose stated, you will have to pay the
10% penalty until the years when you become 59 1/2 years
old.

Bill

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angry_white_male[at]eudoramail.com (Angry Male) writes:

- quote -

See Publication 590 for the exceptions to the penalty. Debt
reduction isn't one of them.

Phil Marti
Topeka, KS

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I have about $3000 in a traditional IRA that I rolled over
from a 401k plan after being laid off a year ago. I've
since found new work in the public sector where a 401k plan
is not available to us (traditional public employee pension
plan). I cannot roll this money over into my employer's
retirement plan and it's basically sitting in the IRA
account earning very little. I put it in a cash equivalent
fund to avoid a loss if the stock market tanked again.

I want to disburse this money to use for other things (i.e.,
paying off debt). I'm 32 years old, so I have quite a ways
to go before retirement.

I understand that a disbursement will make it taxable
income, however I'm looking to avoid the 10% penalty.

Thanks.

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