Penalty for liquidating ira account
In the end, your nest egg would only have grown to $973,000.
While $973,000 for retirement is nothing to sneeze at, taking that $20,000 early cost you approximately $93,000 in future earnings from compounding interest.
The issue is, when can you withdraw earnings without paying the 10% early withdrawal penalty mandated by the IRS? All the same, the benefit of being able to withdraw your contributions without penalties or tax repercussions is a great benefit provided only to Roth IRA investors.
The cons of withdrawing money are common to all retirement accounts, but with different wrinkles depending on the laws and regulations that govern them.
If you never invested another dime into your nest egg and just let it compound for another 20 years, you would be sitting on $1.06 million.