Remember though that it's a 10% penalty PLUS regular income tax.
Only if you take it before 59 1/2 and are still working. The wife just retired at 55. After she separated from employment we took a small distribution. There was no 10% penalty. They witheld only on the gain based on the normal tax rate. Otherwise, they would have witheld the 10% also.
>>Remember though that it’s a 10% penalty PLUS regular income tax.
Is it regular income tax, or regular capital gains tax? Probably depends on the investment. My IRA is self-funded with post-tax money. Since I give to a 401(k) at work, it never qualified for any tax breaks. But if I did the same my 401(k), I’d guess I’d pay regular income tax. But I must admit ignorance on these kinds of tax matters.
I’m thinking I should close it since it gains me nothing more than a brokerage account, which I already have.
Perhaps use it to buy ‘prepper’ supplies or expand my gardening capabilities.