In a pinch, you may need to take some money out of your traditional IRA(s) before age 59 1/2, which we will call early withdrawals.

Most traditional IRA withdrawals are at least partially taxable. The taxable portion of withdrawals taken before age 59 1/2 will also be hit with the 10 percent early withdrawal penalty tax unless an exception applies.1

For purposes of the exceptions to the 10 percent early withdrawal penalty tax, traditional IRAs include IRAs, SEP-IRAs, and SIMPLE IRAs.

Early withdrawals from a SIMPLE IRA during the first two years of participation incur a 25 percent penalty tax instead of the usual 10 percent penalty.2 For simplicity, we will not consider this 25 percent penalty in the rest of this article. But remember this higher penalty rate, because it can be unexpected and costly.

Finally, there can be a 10 percent penalty tax on the non-taxable portion of some early Roth IRA withdrawals, as we will explain later in this article.3

The good news is, there are quite a few exceptions to the 10 percent penalty tax for early IRA withdrawals, and we will now cover them. Here goes.

Exceptions to the Penalty Tax on Early IRA Withdrawals

You can withdraw money from an IRA at any time and for any reason because you, as the account owner, are in total control. But most traditional withdrawals will be at least partially taxable, and the 10 percent penalty tax can hit the taxable portion of withdrawals taken before age 59 1/2.

The current list of exceptions to the 10 percent penalty on early IRA withdrawals goes like this.

Penalty Exception 1. Withdrawals That Count as Substantially Equal Periodic Payments

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