Once you reach age 59 1/2, you are entitled to receive IRA distributions without penalty. You will pay taxes when you withdraw your pre-tax contributions and when you withdraw any earnings. However, if you are under age 59 1/2 and receive an IRA distribution, an additional penalty of 10% will apply, unless you claim one of the following exceptions:
1) First-time home purchase (up to $10,000).
2) Qualified education expenses (for you, your spouse, children, or grandchildren).
3) You become disabled (you must prove that you are incapable of working).
4) Non-reimbursed medical expenses (expenses must exceed 7.5% of your adjusted gross income).
5) Health insurance for the unemployed (only after 12 consecutive weeks of collecting unemployment benefits).
6) Substantially equal annuity payments.