What is the minimum age for penalty-free withdrawals from a traditional IRA?

The minimum age for penalty-free withdrawals from a traditional IRA is 59½ years old. This age requirement is established by the Internal Revenue Code, which allows individuals to take distributions from their IRAs without incurring the 10% early withdrawal penalty once they reach this specific age.

Distributions taken before this age are subject to penalties unless an exception applies, such as in cases of disability or significant medical expenses. The purpose of this rule is to encourage individuals to save for retirement and prevent premature consumption of retirement funds, thereby promoting long-term financial security.

The choices that suggest ages earlier than 59½ are not aligned with IRS regulations regarding early withdrawals, while the option stating 65 years old is not relevant as it exceeds the specified threshold for penalty-free withdrawals. Thus, reaching 59½ is a critical milestone for IRA account holders to remember when planning their withdrawals.