The age for penalty free withdraws begins at fifty-nine and a half years of age in most cases. That age is a little bit higher if you did not begin to fund your account until later.

The penalty for an early withdraw of your IRA funds is 10%. This is in place to try to encourage people to keep their money in their IRAs until retirement age. There are some exceptions to the early withdrawal rules.

The 2010 Roth IRA early withdrawal rules provide that you may withdrawal your funds early if you are a first time home buyer, become disabled, or are using your money to fund higher education either for yourself or a dependent.

The 2010 Roth IRA early withdrawal regulations also say that you may not withdrawal your funds penalty free at age 59 and a half unless you have had your funds in the roth IRA for at least five years. This means that if you did not begin to fund your roth IRA until the age of 58, then you could withdrawal your funds penalty free until age 63. This is known as the five year rule.

The reason for the five year rule is to avoid people trying to turn quick short term gains. Remember, a Roth IRA is not intended to be a day trading tool, but rather a long term retirement one. If you are looking for more excitement in your investing life, then you should purchase regular stocks. Keep your retirement in for the long haul!