ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Down payment on your first home
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To pay for higher education
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To pay taxes owed to the IRS
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To pay for unreimbursed medical expenses
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Detailed explanation-1: -If you’re disabled, you can withdraw IRA funds without penalty. If you pass away, there are no withdrawal penalties for your beneficiaries. You can avoid an early withdrawal penalty if you use the funds to pay unreimbursed medical expenses that are more than 7.5% of your adjusted gross income (AGI).
Detailed explanation-2: -Generally, early withdrawal from an Individual Retirement Account (IRA) prior to age 59½ is subject to being included in gross income plus a 10 percent additional tax penalty. There are exceptions to the 10 percent penalty, such as using IRA funds to pay your medical insurance premium after a job loss.
Detailed explanation-3: -With a Roth IRA, contributions are not tax-deductible Withdrawals must be taken after age 59½. Withdrawals must be taken after a five-year holding period. There are exceptions to the early withdrawal penalty, such as a first-time home purchase, college expenses, and birth or adoption expenses.
Detailed explanation-4: -Only Roth IRAs offer tax-free withdrawals. If you withdraw money before age 59½, you will have to pay income tax and even a 10% penalty unless you qualify for an exception or are withdrawing Roth contributions (but not Roth earnings). More items