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What are the rules for withdrawing distributions from a traditional IRA?

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.

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