Are there any good IRA tricks for withdrawls for younger folks?

Question

I am in a somewhat unique position.
I am 36 years old, and I have 1.2m in my IRA.
I know that this is a problem that alot of people would like to have, but it presents me with an interesting delimma.

Because it is a substantial percentage of my net worth, I would like to find out if there are any ways to get to the money with less penalty (get the most out possible). I would like to make my life "simpler" by paying off my mortgage (I'm getting ready to start a family).

Answer 1

You have two choices, substantially equal payments or convert some to a ROTH.
After converting money to a ROTH if you wait 5 years you can withdraw the money but not the growth. You pay the tax on conversion so don't need to pay when you withdraw.
You could take substantially equal payments but they need to be 5 years or until you are 59.5 which ever is longest.
Don't pay off your mortgage it is cheap money. Stop putting money in the IRA and use some of that to make payments. Then convert say 12K a year to a ROTH paying the tax at your marginal rate and in 5 years you can start taking back 12K per year.
Read publication 590 at IRS.GOV

Answer 2

if you have 1.2m in ira since you could only put 5k in a year you have to be a lot older than 35 how 300!!!