It’s back to school time! This means it’s time for school supplies and additional expenses. Are you considering using your IRA to pay that large tuition bill? The rules can be complicated. Here are 10 things you will want to know about using your IRA for educational expenses.
1. Typically, if you take a taxable distribution from your IRA before you reach age 59 ½, you are subject to a 10% early distribution penalty. The exception to the penalty allows you to take a penalty-free distribution from your IRA if you use the funds for qualified higher education expenses.