Some educational expenses for you and your immediate family are eligible. The only divorce-related exception for IRAs is if you transfer your interest in the IRA to a spouse or former spouse and the transfer is made under an instrument of divorce or separation (see section 408 (d) () of the IRC. The IRA distribution rules allow you to use traditional IRA money to pay for higher education expenses not only for yourself, but also for your immediate family members (your spouse, children, and grandchildren). The IRS exceptions are a little different for IRAs and 401 (k) plans; they even vary slightly for different types of IRAs.
There are several IRA options and many places to open these accounts, but the Roth IRA and the traditional IRA are by far the most popular types. Every traditional IRA that you convert to a Roth IRA has its own five-year retention period to avoid an early withdrawal penalty. So how much do you need to withdraw from your IRA? The minimum withdrawal rules for an IRA are based on life expectancy. There are some exceptions due to financial hardship to the penalties for withdrawing money from a traditional IRA or from the investment earnings portion of a Roth IRA before turning 59 and a half years old.
If you transfer your traditional or Roth IRA and request that the check be paid, you have up to 60 days to deposit that check in another IRA without taxes or penalties. In general, a qualified charitable distribution is a taxable distribution of an IRA (other than an ongoing SEP or SIMPLE IRA) owned by a person aged 70 and a half or older and that is paid directly from the IRA to a qualified charity. While the withdrawal rules of a traditional IRA allow you to delay the first required minimum distribution of your IRA until April 1 of the following year, you may want to make your first distribution the first year you are eligible. If you convert a traditional IRA to a Roth IRA, you must pay taxes for the conversion, but you'll never have to worry about paying taxes on that IRA again for eligible retirees, even if future tax rates are higher.
The other time you risk receiving a tax penalty for withdrawing money early is when you transfer money from one IRA to another qualified IRA.