One common question people have about their retirement accounts is whether they can use traditional IRA funds to pay for healthcare expenses. The easy answer is no – traditional IRA funds cannot be used to cover healthcare costs. However, there are a couple of exceptions to this rule.
If you are over the age of 59 ½, you can withdraw funds from your traditional IRA without penalty. This means that you could use those funds to cover healthcare costs, if needed.
Another exception is if you are disabled and unable to work. In this case, you may be eligible to withdraw funds from your traditional IRA without penalty.
If neither of these exceptions applies to you, then you will likely have to pay a penalty if you withdraw funds from your traditional IRA to cover healthcare costs. The penalty is 10% of the withdrawal amount, plus you will also have to pay taxes on the money you withdraw.
In general, it is best to avoid using traditional IRA funds to cover healthcare costs if at all possible. However, if you absolutely need the money, there are a few exceptions that you may be able to take advantage of. Just be sure to understand the rules and penalties before you make any withdrawals.
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