Investment Company and Variable Contracts Products Representative (Series 6)Practice Exam

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Early withdrawal from an IRA without penalty is allowed for which of the following reasons?

Relocation for work
Medical expenses
New job
First-time home buyer expenses

The correct answer is: First-time home buyer expenses

Early withdrawal from an IRA without penalty is allowed under certain specific circumstances outlined by the IRS. One of those exceptions includes using funds for qualified first-time home buyer expenses, which allows individuals to withdraw up to $10,000 from their IRA without incurring the usual early withdrawal penalty, provided certain conditions are met. This exemption applies to first-time home buyers or those who haven't owned a home in the past two years, and the funds must be used toward purchasing or building a primary residence. The other scenarios, while they may involve significant life events, do not qualify for penalty-free early withdrawals. Relocating for work may involve expenses, but it does not meet the IRS criteria for withdrawal without penalty. Medical expenses generally require a high amount that exceeds a certain percentage of adjusted gross income for penalty-free withdrawal, and simply starting a new job does not permit early withdrawals without penalties.