It depends. If you are 59½ or older, you can take money from your IRA without penalty. In contrast, if you withdraw from your IRA before age 59½, you may be hit with the 10 percent penalty on top of whatever income taxes you owe on the distribution. This penalty, known as the premature distribution tax, is intended to discourage people from exhausting their IRA funds before they retire.

However, there are some exceptions to this rule. Premature IRA withdrawals made by a disabled person may be exempt from the penalty. If an IRA owner dies before age 59½, distributions paid to you as a beneficiary of the account are not subject to the penalty. If you need supplementary income, you can take IRA distributions as a series of "substantially equal payments" over your life expectancy or the joint life expectancy of you and your beneficiary. These distributions will avoid the penalty as long as you don't modify the payments within certain time frames. Subject to limits and conditions, the penalty tax generally will not apply to IRA distributions taken to pay qualifying medical expenses, health insurance premiums while unemployed, higher education costs, and first-time home-buyer expenses. It also does not apply to amounts rolled over from one IRA to another (assuming you follow the rules for rollovers), or to amounts that the IRS levies from your IRA to cover your tax bill.

Other exceptions may also apply. Finally, Roth IRAs and education IRAs may be subject to special rules of their own.