Locked ira

title: I don't want to be locked into an IRA. description: [AFW S.12.15] Securities Objection #15 published: true date: 2026-06-30T08:12:01.469Z tags: editor: markdown dateCreated: 2021-11-11T00:19:17.173Z

Watch I don't want to be locked into an IRA VIDEO

Use this script when your prospect is concerned about the early withdrawal cost of IRAs.

Prospect: I don't want to be locked into an IRA, there are consequences if I take the money out early, right?.

Advisor: By that do you mean you are concerned that a situation may arise where you need to make an early withdrawal?

Prospect: Right.

Advisor: Of course, the first step is to have an emergency fund so that you don't, in fact, withdraw your retirement money until retirement. But let's see what might happen if you did take money out before you're 59 ½ years old: Uncle Sam will charge you 10% penalty and the back-taxes on your interest. However, when you contribute your money to an IRA you receive two benefits: (1) You get the current deduction, if it's a traditional IRA. And (2) deferral of taxes on your earnings. In the case of a Roth your withdrawals are completely tax-fee. Anyway, in almost all tax brackets, if you can let the money sit for ten years or more, the current deduction and deferred taxes on interest, outweigh the penalty and taxes. Therefore, I think you'll agree that the long-term advantages of a mutual fund / IRA as I showed you earlier, far outweigh the drawbacks.