Withdrawals Before Age 59 1/2
Withdrawing funds before age 59 1/2, in general, will result in a 10 percent penalty. Coupled with the penalty, any funds withdrawn must also be taxed as income. This penalty is from the IRS, and is a reason why waiting until age 59 1/2 is advantageous.
Monthly Withdrawals After Age 59 1/2
People age 59 1/2 and older can withdraw funds without penalty. These funds are calculated based on your previous work income. Though you will not incur penalties after age 59 1/2, you still must pay income tax on the withdrawn funds.
Lump Sum Withdrawal After Age 59 1/2
Retired individuals also have the ability to withdraw lump sums. These sums do not incur any penalty after age 59 1/2, but are taxed as income.