When can I take money out of my IRA early without the 10% penalty?

Withdrawals before 59½ normally trigger a 10% penalty plus income tax, but the IRS allows several penalty exceptions (you may still owe income tax on pre-tax amounts). You can take up to $10,000 lifetime for a first-time home purchase. Qualified higher-education expenses for you, a spouse, child, or grandchild are exempt with no dollar cap. Unreimbursed medical expenses above 7.5% of your AGI qualify, as do health-insurance premiums while unemployed. Other exceptions include permanent disability, certain birth or adoption costs (up to $5,000), an IRS levy, and substantially equal periodic payments (72(t)). These IRA exceptions differ somewhat from 401(k) rules. Even with an exception, raiding retirement money sets your future back, so treat early withdrawals as a last resort after exhausting an emergency fund.