You can accept distributions from your IRA (including your SEP-IRA or SIMPLE-IRA) at any time. There is no need to show difficulties in accepting a distribution. Here are nine cases where you can withdraw money early from a traditional or Roth IRA without being penalized. Your IRA provider must declare the amount you withdraw as a death distribution and include the code “4” in box seven of the IRS Form 1099-R, the form used to declare the distribution.
Traditional and Roth IRA distributions can carry a 10% penalty if you accept them too soon, but there are exceptions to early withdrawals that allow you to skip the fine. Since experts agree not to withdraw money from a Roth IRA unless absolutely necessary, there are other options for you. This means that you're not required to withdraw money from your Roth IRA after you reach a certain age, so your earnings can grow tax-free for as long as you want. If you need to make regular withdrawals from your IRA for a few years, the IRS allows you to do so without penalty if you meet certain requirements.
You just have to do what is called a clandestine Roth IRA, which consists of using a traditional IRA conversion to deposit the money. While Roth IRAs aren't meant to be a savings account, Roth IRAs allow you to withdraw funds without the 10% early withdrawal penalty, but only with a few exceptions. The government charges a 10% penalty for early withdrawals from a traditional IRA, and a state tax penalty may also apply. The Internal Revenue Service (IRS) imposes a 10% penalty on early IRA withdrawals to encourage you to keep your retirement savings intact.
You won't have to pay any penalty for withdrawing contributions or profits from a Roth IRA, as long as the account has been open for at least five tax years. If you adopt (or give birth) to a child, you can withdraw funds from your IRA if it's within the first year after the adoption ended (or the baby's date of birth). If you're really in a hurry, you can withdraw your contributions for a short period of time and redeposit them within 60 days to avoid fines. With a traditional, cumulative, SEP or SIMPLE IRA, you make pre-tax contributions (if your income is below a certain level and meets certain other requirements) and you don't pay taxes until you withdraw money.
A Roth IRA is one of the best retirement accounts you can have, allowing you to earn interest on your money without paying taxes.