Other Borrowing Approaches

Penalty-Free IRA Withdrawals

Since you are not permitted to borrow from your Individual Retirement Account, you can make a penalty-free withdrawal under certain circumstances. The 10% penalty that applies to most early withdrawals from IRAs (before the account owner reaches age 59½) will not apply to the following types of withdrawals:

  • Distributions made after the death of the account owner.*
  • Distributions made due to disability of the account owner.*
  • Withdrawals used to pay qualified medical expenses that exceed 10% (7.5% age 65 or older) of adjusted gross income.
  • Withdrawals used to pay qualifying health insurance premiums for certain unemployed individuals.
  • Withdrawals for qualified higher education expenses of the taxpayer, spouse, children, or grandchildren.
  • Withdrawals for a qualified first-time homebuyer, subject to a $10,000 lifetime limit. The withdrawal must be used to acquire a principal residence of the taxpayer, spouse, child, grandchild, or ancestor. The withdrawal is permitted, generally, if the taxpayer has not owned a principal residence in the preceding two years.*

* If these distributions are made from a Roth IRA, they will also be tax-free provided the Roth IRA was held five years or more.

IMPORTANT NOTE: Be careful not to jeopardize your retirement savings by making withdrawals from your IRAs. Explore other ways to borrow first.

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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a Registered Broker-dealer (Member FINRA/SIPC) and SEC-registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. General Electric Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.