Traditional, Rollover, or SEP IRA

In many cases, you'll have to pay federal and state taxes on your early withdrawal, plus a possible 10% tax penalty.

Before age 59½, the IRS considers your withdrawal (also called a “distribution”) from these IRA types as an early withdrawal, triggering a possible tax penalty.

Taxes and penalties

In many cases, you'll have to pay federal and state taxes on your early withdrawal, plus a possible 10% tax penalty.

Exception

You may be able to avoid the 10% tax penalty if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death or disability
• For health insurance (if you are unemployed)
• Some medical expenses

If any of these situations apply to you, then you may need to file IRS form 5329 to claim the exemption. For a full list of exceptions, see IRS PUB 590b at www.irs.gov. Always consult your tax advisor about your specific situation.

Withdrawal options

Withdrawals can be initiated online using the “Withdraw from your IRA” button, with your choice of how to receive the money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). Link your bank nowLog In Required
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)

Roth IRA

A Roth IRA allows you to withdraw your contributions at any time—for any reason—without penalty or taxes.

For example: If you opened your first Roth IRA 2 years ago and you have made a total of $12,000 in contributions that have grown to $13,200, you could withdraw your contributions up to $12,000 without needing to pay tax and penalties. However, if you do not meet the requirements for a qualified withdrawal and need more than your contributions, the $1,200 in growth would be subject to tax and penalties.

Roth conversions are also eligible to be withdrawn without penalty or taxes, as long as they have been in your Roth for 5 years. Keep in mind, if you have done more than one conversion, each one has to satisfy its own 5 year aging period.

Qualified Roth withdrawals

“Qualified” withdrawals (also called “qualified distributions”) from a Roth means you get your distributions free from federal income tax and penalty free. For your withdrawal to be considered qualified, you need to own your Roth for 5 years AND you must be withdrawing under any of the following circumstances:

• Age 59.5
• First-time home purchase (up to $10,000)
• Disability
• Death

Non-qualified Roth withdrawals

If you don’t meet the requirements of a qualified withdrawal above, distributions would be taken from your account in the following order:

1. Contributions
2. Conversions
3. Earnings

Taxes and penalties

In many cases, you'll have to pay taxes plus a 10% penalty on your earnings. An early withdrawal of a Roth conversion could also be subject to a 10% recapture penalty, if it has not met the required 5 year aging period in your Roth IRA.

Exceptions

You may be able to avoid the 10% tax penalty if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death or disability
• For health insurance (if you are unemployed)
• Some medical expenses

If any of these situations apply to you, then you may need to file IRS form 5329 to claim the exeption. For a full list of exceptions, see IRS PUB 590b at www.irs.gov. Always consult your tax advisor about your specific situation.

Withdrawal options

Withdrawals can be initiated online using the “Withdraw from your IRA” button, with your choice of how to receive the money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). Link your bank nowLog In Required
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)

When you take a withdrawal from a SIMPLE IRA before age 59½, the IRS considers your withdrawal an early distribution. 

Taxes and penalties

In many cases, you'll have to pay federal and state taxes on your early withdrawal. There may also be a 10% tax penalty. A higher 25% penalty may apply if you take a withdrawal from your SIMPLE within 2 years of your first contribution.

Exceptions

You may be able to avoid the 10% and 25% tax penalties if your withdrawal falls under certain exceptions. The most common exceptions are:

• A first-time home purchase (up to $10,000)
• A birth or adoption expense (up to $5,000)
• A qualified education expense
• A death or disability
• For health insurance (if you are unemployed)
• Some medical expenses

If any of these situations apply to you, then you may need to file IRS form 5329 to claim the exception. For a full list of exceptions, see IRS PUB 590b at www.irs.gov. Always consult your tax advisor about your specific situation.

Withdrawal options

Withdrawals from a SIMPLE IRA can be initiated using our separate form or by calling us for assistance at 800-343-3548. You’ll have the following choices of how to receive your money:

• Electronic funds transfer (EFT) to your bank (instructions must already be on file). EFT Form (PDF)
• Bank wire to your bank of choice
• Paper check sent via US Mail
• Move cash to a Fidelity non-retirement account
• Move shares in-kind to your Fidelity non-retirement account (must be completed with a representative by calling 800-544-6666)