Retirement Planning

Understanding Traditional IRA Distributions

You work hard, save money, and plan ahead for retirement. So if you're wondering when you can take distributions from your IRA, and how distributions work, we have some information that may help.

How Do Distributions from My Traditional Individual Retirement Account Work?

Like many Americans, you work hard and save as much as you can to help financially plan for retirement. As such, you may have your money in a variety of different retirement savings accounts so when you retire, you'll have the needed funds to support your new lifestyle.

One of the most common retirement savings vehicles is the traditional individual retirement account (IRA). When you stop putting money in your IRA and begin withdrawing cash (for retirement income or for other purposes) is what's referred to as a distribution.

Take note: Distribution rules and penalties for traditional IRAs will differ from Roth IRAs.

Distributions in the traditional IRA

You can withdrawal money from your traditional IRA just about any time. However, withdrawals that are made before age 59 ½ may be subject to a 10 percent early withdrawal penalty.1 It's important to note that there are certain circumstances under which you may be able to take penalty-free withdrawals prior to age 59½. They may include:

  • Qualified first-time homebuyers (up to $10,000)

  • A death or permanent disability

  • Unreimbursed medical expenses (within guidelines)

  • Health insurance (if unemployed)

  • Qualified higher education expenses

Between the ages of 59½ and 70½, distributions from your traditional IRA may be withdrawn without penalty. However, once you reach age 70½, you must begin making minimum withdrawals, also known as minimum required distributions (MRDs). These MRDs are considered mandatory, and may result in severe penalties if not taken.2

Knowing how much you may be required to withdraw from your traditional IRA is an important concern when it comes to retirement planning. Try using Bankrate.com's online MRD calculator to get a better idea of what you might be looking at.

Take note: Distributions from a traditional IRA are considered taxable income.

To find out how distributions from your traditional IRA may affect your individual retirement income planning, be sure to speak with your financial professional.

1. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics---Tax-on-Early-Distributions
2. http://www.irs.gov/Retirement-Plans/Plan-Participant,-Employee/Retirement-Topics-Required-Minimum-Distributions-(RMDs)

Additional sources used in this article:
http://www.bankrate.com/calculators/retirement/ira-minimum-distribution-calculator-tool.aspxhttp://www.irs.gov/Retirement-Plans/Traditional-IRAs

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Individual Retirement Accounts

When you retire, you'll begin to take money out of your individual retirement accounts. When you withdrawal money from your individual retirement accounts, it's referred to as a distribution. However, before you begin drawing income from your individual retirement accounts, you need to understand that there are specific guidelines regarding distributions that if not met, may result in penalties. Consult with your insurance or financial professional for more information on how IRA distributions work. For more information, visit the Protective learning center.


All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Companies and organizations linked from Learning Center articles have no affiliation with Protective Life or its subsidiaries.

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