Retirement Accounts
Which of the following traditional IRA distributions would be subject to the 10% early withdrawal penalty?
10% penalty exceptions: age 59.5+, death, disability, first-time home, certain education.
Complete Analysis & Legal Rationale
A withdrawal for personal expenses like vacation at age 45 would be subject to both ordinary income tax and the 10% early withdrawal penalty. Exceptions include disability, death, and distributions after age 59 1/2.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Disability is an exception to the 10% early withdrawal penalty.
Distributions after age 59 1/2 are not subject to the penalty.
Matches the verified teaching point in the explanation.
Death distributions to beneficiaries are exempt from the 10% penalty.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.