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All About IRA Cashouts
by Staff
It can take years, and often decades, to build up funds in an Individual Retirement Account (IRA). However, it can take just moments to cash it out. Do you know the ins and outs of IRA cashouts? Take our quiz to test your knowledge!

At what age can you draw on your IRA without incurring penalties?

  • 59 1/2
  • 62
  • 65 1/2

Of all the people who leave their jobs, how many cash out their IRAs?

  • 16 percent
  • 36 percent
  • 46 percent

How much is the early withdrawal penalty?

  • 2 percent
  • 6 percent
  • 10 percent

When can you avoid penalties if you want to withdraw funds early?

  • when paying for a funeral
  • when paying for medical expenses that insurance doesn't cover
  • both of the above

Which of these situations allows you to withdraw money penalty-free from your IRA before age 59 1/2?

  • You want to buy a vacation home.
  • You want to retire early and arrange for regular withdrawals for at least five years.
  • You owe back taxes.

Hardship exceptions that allow penalty-free withdrawals include which of these?

  • first-time home buying
  • education expenses for you or your family
  • both of the above

When should you withdraw funds from an IRA?

  • when the investment keeps going down, not up
  • when you want some cash on hand
  • neither of the above

Withdrawing from an IRA to pay off credit cards is:

  • never a good idea
  • always a good idea
  • dependent on the situation

If you're at risk of foreclosure or eviction, your IRA funds can be considered:

  • a potentially penalty-free way of keeping your home
  • untouchable
  • collateral to offer the mortgage company or landlord

You can qualify for penalty-free withdrawals with:

  • any employer
  • any type of IRA
  • none of the above