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Getting to your money before 59½

Last updated October 30, 2026

Money taken out of a traditional IRA or 401(k) before 59½ usually owes a 10% penalty on top of income tax. There are several ways to reach your savings earlier without it, and your plan models each of them.

A taxable brokerage account has no age rule. You pay capital gains tax only on the growth, and at modest incomes that rate is 0%, so it is the usual way to cover the years before 59½.

A Roth IRA gives back what you put in at any age, free. Money you converted into it from a traditional account comes out free once that conversion is five years old, and pays the 10% penalty before then. Growth taken out before 59½ owes income tax and the 10% penalty.

The Rule of 55: if you leave your employer in or after the year you turn 55, withdrawals from that employer's 401(k) or 403(b) owe no 10% penalty. For public safety employees, such as police officers and firefighters, the age is 50. It covers only the plan at the job you leave, not IRAs or plans from earlier jobs, and only while the money stays in that plan: moving it to an IRA ends it. Some plans pay out only as a single lump sum, so check your plan's rules before counting on it.

72(t) payments, also called substantially equal periodic payments, take a fixed yearly amount from an IRA, set by an IRS formula, with no penalty. Once they start they must continue for five years or until 59½, whichever is later. Changing them early brings back the penalty on everything already taken. The IRS allows three ways to set the amount. Your plan models two, both on the IRS Single Life Expectancy table: the required minimum distribution method (your balance divided by your life expectancy, recomputed each year) and fixed amortization (the same dollar amount every year, set by your starting balance and an interest rate of up to 5%, or 120% of the federal mid-term rate if that is higher).

In your plan: on the Accounts page, mark the 401(k) at the job you'll retire from as an active plan, and tick public safety employee if that applies. If your retirement age is 55 or later (50 for public safety), that plan is drawn first before 59½, with no penalty. Next comes the free part of your Roth accounts, before any traditional money that would owe the penalty, and other accounts follow in your withdrawal order. Enter the total you've contributed to each Roth account so its free part is counted. 72(t) payments are set up in the Household section.

In the year you turn 59½, the penalty falls only on the part of the year before that date, counted from your birth month. Your plan assumes the year's spending is spread evenly, and a July birthday if you haven't entered the month.

For a married couple, each account follows its owner's own age: the 10% penalty applies only before the owner turns 59½, and the 20% on an HSA only before the owner turns 65. Your plan draws first from the accounts of whichever of you is past 59½. An IRA, 401(k) or Roth IRA inherited from your spouse owes no 10% penalty at any age, so your plan draws it before your own.