I took money out of my Retirement because I became unemployed and need to pay my bills is there still a penalty?

[IreneS · Accepted solution]

Unfortunately, yes.

Generally, if you are under age 59-1/2, you must pay a 10% additional tax on the distribution of any assets (money or other property) from your pension plan or traditional IRA. Distributions before you are age 59-1/ 2 are called early distributions.

The IRS Retirement Topics - Exceptions to Tax on Early Distributions lists the exceptions to the additional tax:

• Separation from service in or after the year reaching age 55 (age 50 for qualified public safety employees)
• Equal periodic payments
• Total and permanent disability/death
• Medical expenses [if the amount of unreimbursed medical expenses >7.5% AGI or 10% if under age 65]
• Paid alternate payee under a QDRO
• Unemployed individuals for health insurance premiums  (only IRAs)
• Higher education expenses (only IRAs)
• First home purchases (only IRAs)
• IRS levy of the qualified plan
• Qualified distributions to reservists