I've taken out over 10k in cash at a time without penalties. Never heard of being charged for that. Originally Posted by KickrocksIf she is referring to traditional IRA's:
Early Distributions
If you take a distribution out of your traditional IRA before you reach 59.5 years, it is called an early distribution. You will owe not only the income tax on the money, but you also will be assessed a federal penalty tax equal to 10 percent of the money you withdrew. If you were in the 25 percent tax bracket and took an early distribution of $1,000, you would pay $250 in income tax and $100 for the early withdrawal penalty. You would net only $650 after 35 percent of your early distribution is taken for taxes and penalties.
Penalty Exceptions
There are certain circumstances where the IRS will waive the 10 percent penalty tax, although you will still owe income tax. The penalty will be waived if you take an early distribution because of permanent disability, to pay college tuition, to pay health insurance premiums if you’ve been unemployed at least 12 weeks, to pay unreimbursed medical expenses exceeding 7.5 percent of gross income, or to pay your heirs after your death. You also avoid the penalty if you withdraw up to $10,000 to buy or build your first house, take out money to satisfy an IRS tax levy, or to pay family living expenses if you are a National Guard reservist called to active duty for at least six months. You can also avoid the penalty if you take your distribution in a series of equal payments over multiple years rather than a lump sum.