Feel free to ask us anything and everything

Will I Be Exempt from IRS Penalties on Early Withdrawals from my Later Account?

There are tax implications (generally a 10% penalty and possibly income taxes and other penalties) for early withdrawals from an IRA, but sometimes the IRS will waive a tax penalty for early withdrawals. We’ve listed some of the exceptions below.The IRS also talks about this here. Please talk to a tax specialist before making any decisions.

Qualified Reservist Distributions (QRDs) - These are for military members who were called into active duty from the reserves for over 180 days.

Disability - The IRS defines disability as “total and permanent disability of the IRA owner.” To qualify for this exemption, your condition must prevent you from working.

Death - Contact support@acorns.com if you are the beneficiary or trustee of an Acorns Later account. Legal documents may be required.

Education - IRA funds may sometimes be withdrawn without tax penalty for higher education expenses. Talk to a tax specialist about your options.

Medical - The IRS splits medical exemptions into two categories: unreimbursed medical expenses and medical insurance if you are unemployed.

Was this helpful?

This website is operated by Acorns Advisers, LLC, an SEC Registered Investment Advisor. Brokerage services are provided to clients of Acorns by Acorns Securities, an SEC registered broker-dealer and member FINRA/SIPC. Securities in your account protected up to $500,000. For details, please see www.sipc.org. Investments are not FDIC insured and may lose value. Investing involves risk including loss of principal. Please consider, among other important factors, your investment objectives, risk tolerance and Acorns pricing before investing. Past performance does not guarantee or indicate future results. Acorns reserves the right to restrict or revoke any and all offers at any time. Acorns also offers an Acorns Spend deposit account. Acorns Spend accounts are FDIC insured up to $250,000. Acorns Visa™ debit cards are issued by Lincoln Savings Bank, member FDIC for Acorns Spend account holders. "Acorns" and "Invest the Change" are registered trademarks of Acorns Grow, Inc.