Premature Distributions - Withdrawals prior to age 59 1/2
Traditional IRA: Withdrawals prior to age 59 1/2 will be subject to an early withdrawal penalty of 10% and the amount will be reported as taxable income.
Premature distribution
A distribution from an IRA before the owner reaches age 59-1/2. Generally, a 10% penalty tax is owed on such a distribution. Also known as an early distribution or an early withdrawal.
On nonqualified distributions, these untaxed earnings will be subject to income tax but not to the premature distribution penalty of 10%, if the following exceptions apply:
Medical expenses that exceed 7.5% of your Adjusted Gross Income (AGI), ...
Early withdrawal
See: Premature distribution
Early withdrawal penalty
Penalty paid by the holder of a fixed-term investment penalizing an investor who withdraws money before the agreed-upon maturity date.
premature distribution The withdrawal before the age of 59 ½, from a qualified retirement plan; generally accompanied by a penalty. premise The underlying rationale or basis for an argument.
 See also: Vesting, Distribution, Retirement, Expenses, Earnings
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