Question

Jimmy has just turned 50 years old, and he has retirement savings in an IRA. How many years will he have to wait to withdraw money without penalty?

a. 9.5 years
b. 70.5 years
c. 20.5 years
d. 59.5 years

Answer 1

Jimmy must wait until he is 59.5 years old to withdraw from his IRA without penalty, which means he has 9.5 years to wait.

Step-by-step explanation:

Jimmy, who has just turned 50 years old, will have to wait until he is 59.5 years old to withdraw money from his Individual Retirement Account (IRA) without incurring a penalty. This is known as the early distribution penalty and it applies to most retirement savings accounts. Withdrawing funds before reaching the age of 59.5 typically results in a 10% penalty on the amount withdrawn in addition to regular income taxes. Jimmy has 9.5 years to go before he reaches the eligible age to withdraw funds from his retirement savings without facing this early withdrawal penalty.