Thumbs Up: Tapping IRAs Early

Conventional wisdom says you donot touch the money in your IRAuntil you retire. That's what it's for, andbesides, you get hit with income taxesplus a 10% penalty if you grab some ofthe cash before you reach age 59 1/2.But there are times when you can dipinto your IRA penalty free. If youhaven't owned a home in 2 years andyou're using the money to buy ahouse, there's no penalty. Ditto for collegeexpenses, although a 529 collegesavings plan is a better idea since themoney you take out of a 529 plan forcollege is tax-free as well as penalty free.And if you have medical expensesthat are more than 7.5% of youradjusted gross income, you can paythem out of your IRA without gettinghit with a penalty.