At what age can individuals start withdrawing from their IRAs without penalty?

Individuals can start withdrawing from their Individual Retirement Accounts (IRAs) without incurring a penalty at the age of 59½. This age is established by tax law to encourage retirement savings while also allowing individuals a degree of access to their funds as they approach retirement. Withdrawals made before this age typically incur a 10% early withdrawal penalty, in addition to any applicable income taxes on the distributions.

The age of 59½ is crucial, as it marks the transition where individuals are no longer considered subject to this penalty for early withdrawal, allowing for greater financial flexibility in retirement planning. Therefore, understanding this milestone age is essential for individuals managing their retirement accounts, as it influences their withdrawal strategies and financial planning.