The basic rule of a Roth IRA- do not withdraw your retirement savings before the age of 59,5 unless you want to lose 10% of the withdrawn amount
It is one of the most pointless rules that states that you are not an adult person and you are unable to manage your savings on your own and take a responsibility for your improper decisions. But do not be afraid, there is a list of exceptions in which you are allowed to withdraw without a penalty.
In the following cases you will not be penalized for a too early withdrawal:
1. you are disabled and what follows - unable to work. If you happened to fall a victim of an accident and now you cannot work, but you still need some sources to survive and these are available on your retirement account, you can use it.
2. You still study or you have to take some expensive medicaments - the meds are connected with the first point. It is obvious that if you need some medicaments, you should have money for it. If you have it on your retirement account0 withdraw it and buy what you need. If you study and you need some money for tuition fees- you are also allowed to take it from the Roth IRA.
3. you want to buy a house or another property and it is the first one that you will buy. It is high time to move from your family home, isn't it? You got married or you simply do not want to live with your parents anymore, so there is a good news for you: you can take from your Roth IRA up to $10 000 and spend it for your first property.
4. bills - If you have already bought your property, you have to pay bills every month. But do not worry, at the beginning it is normal that you cannot fully afford it. But if you have money in your Roth, withdraw it and pay your bills.
5. inheritance - When your late relative decided that you will be an inheritor of his or her Roth IRA, you should have a possibility to withdraw this money. And you have it. You will have to pay only an estate tax. You cannot be penalized because you are a heir.
6. conversion - when you convert your traditional IRA to Roth IRA you do not have to pay the penalty, because you do not spend this money, but just change the retirement plan. You will only have to pay a tax.
7. IRS tax levy - if you have some back taxes, you are obliged to pay them. IRA lets you withdrawing your savings for this purpose without any additional costs.
8. military service - If you serve in the military services, you always have right to take your money from a Roth IRA any time you wish.