Using Your IRA to Pay for Higher Education
It is possible, legal, and an option not often considered
I recently learned that funds can be withdrawn from your IRA before age 59 1/2 without penalty to pay for qualified higher education expenses. Having never heard of this I obviously never considered it as an alternative to taking out a government loan. In a finance course I was taking, I read about this option so wanted to do some further exploring.
I contacted my financial wealth advisor who said he had to do his own homework; but, he learned that it IS an option to withdraw funds from my IRA before age 59 1/2 without paying the 10% penalty. As my IRA is a traditional account, it will be subject to taxation on the amount withdrawn. Still a better return than paying off a loan for years to come.
This is obviously not meant to be financial advice for any individual, but something I just learned about that may can help someone else looking for alternative methods to help cover higher education expenses. Talk to your own professional financial advisor to learn more about the options available to you.