IRAs provides great benefits for workers. It allows them to save for their retirement in an account that will give them a variety of investment options. An IRA account acts like a cup that holds many investments like stocks, bonds, mutual funds and so much more. It is up to the account holder which type of investment he or she likes to take on. Aside from investment opportunities, IRA accounts are very appealing to workers because these accounts are subjected to special tax considerations. Usually when you put your money in an IRA account, you will be only taxed just once and not twice like in a regular savings account.
There are different types of IRA and the IRA withdrawal rules for each type may vary slightly from one another. However, there are general IRA withdrawal rules that will give you an idea on how IRAs work. These IRA rules are laid out by the IRS or the Internal Revenue Service to regulate the system and prevent unscrupulous individuals to take advantage of the special tax considerations given to IRA accounts. The IRA rules for withdrawals also safeguards account holders from spending their supposedly retirement fund over things that are not that necessary.
The general IRA rules for withdrawals prevents account holders from cashing out their earnings before he or she reaches the age of 59 ½. The whole point of IRA accounts is to save for retirement. If account holders are allowed to withdraw anytime, the essence of putting up an IRA account will be diminished. Any withdrawals made on the earnings before that age will be subjected to high taxes and penalties.
However, the IRS has laid out some considerations, wherein individuals are allowed to withdraw some of the earnings before the account holder reaches the minimum age requirement for withdrawals. All qualified first-time home buyers are allowed to withdraw of as much as $10,000 from their IRA account for the expenses of the purchasing of the house. Aside from first-time homebuyers, account holders that have incurred a disability are also allowed to withdraw from their IRA account to pay for the maintenance and treatment of their condition.