• The federal government sets the rules for two main types of Individual Retirement Accounts--Roth and traditional IRAs. Though you can access either type early, IRAs are intended primarily for retirement savings. If you withdraw IRA money early, you are subject to an IRS tax penalty. In some cases, you face a penalty if you don't take your money out soon enough.
  
  

Age 59-1/2 Rule

• If you wait until you are age 59-1/2 to withdraw IRA money, you are in good shape. The IRS uses 59-1/2 as its official retirement age, regardless of whether you've stopped working, Social Security rules or other circumstances.
  
  Beginning at age 59-1/2, you can take distributions from a Roth IRA tax-free. Even earnings on your original contributions can be withdrawn tax-free. Withdrawals from traditional IRAs are taxed at the tax bracket you're in at the time you execute the transaction.
  
  

Required Minimum Distributions

• Though you can keep money in a Roth IRA for as long as you like, the IRS requires that you begin taking at least some cash out of your traditional IRA by the time you turn 70-1/2. According to IRS Publication 590, you need to start taking Required Minimum Distributions, or RMDs, by April 1 of the year following the year you turn 70-1/2. In all subsequent years, you have until the end of the tax year to take your RMD.
  
  The amount of your RMD is based on your age, IRA account value and life expectancy. If you don't take an RMD in a given year, the IRS imposes a 50 percent excise tax on the difference between what your RMD should have been and what you actually withdrew.
  
  

Early Withdrawals

• Generally, according to IRS Publication 590, you must pay a 10 percent tax penalty--in addition to applicable regular income taxes--on both Roth and traditional IRA withdrawals that are made prior to age 59-1/2.
  
  Exceptions to this rule do exist. The penalty is waived for withdrawals due to disability; payment of unreimbursed medical expenses totaling more than 7.5 percent of your adjusted gross income; payments you take as a beneficiary from a deceased individual's IRA; distributions taken in the form of an annuity; distributions used to fund qualified higher education expenses, buy, build or rebuild your first home or satisfy an IRS levy; and distributions received when you are a qualified military reservist.