Sunday, March 9, 2014

Withdraw Money from Your IRA Without Penalty

The Lords of Confusion (US Congress) have created the world's most complex income tax system.  In addition to allowing special tax deductions for Alapaca Farmers, there are some advantages for you, my unemployed COBRA heath insurance brethren.

Normally, if you are under 59 1/2 (the half is just there to screw up integer based legacy COBOL programs), you pay a 10% penalty in addition to normal tax if you withdraw from an IRA.  However, if you are unemployed, the 10% penalty is waived if you use the withdrawal to buy health insurance.  The Alpaca farmers have not found a way to get Alpaca IRA benefits, but you can get some help buying health insurance.

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