E*TRADE IRA Withdrawal
If you need to take money out of an Individual Retirement Account (hopefully because you’ve
already reached retirement age and not for another reason), remember that the process is not as simple as
withdrawing money from a taxable brokerage or bank account. Brokerage firms may ask you to
complete paperwork, either on paper or electronically, so the distribution can be correctly
reported for tax purposes. This article will review the IRA withdrawal process at E*TRADE.
First, the Government’s Policies
The IRS generally discourages IRA withdrawals before age 59½. If you take one, you may owe a
10% additional tax on the taxable part of the early distribution unless an exception applies. In addition, withdrawals from a Traditional, SEP, or SIMPLE IRA are generally taxable. Taking money out of a SIMPLE IRA within 2 years after you first participated in the employer’s SIMPLE IRA plan raises the additional tax from 10% to
25%.
The government does provide some exceptions for people under age 59½. Withdrawals made because of total and permanent disability, or to pay certain health insurance premiums while unemployed, will not trigger the 10% penalty. Withdrawals for qualified higher education expenses or a first-time home purchase are also allowed, subject to IRS limits and requirements.
Uncle Sam also permits IRA owners to withdraw retirement money for unreimbursed medical expenses if those costs are more than
7.5% of adjusted gross income.
After you reach the required beginning age, IRA rules require you to begin taking withdrawals. Known as required minimum distributions (RMDs), these withdrawals apply to Traditional, SEP, and SIMPLE IRAs. A Roth IRA has no RMD during the lifetime of the original account owner.
Under current rules, many IRA owners must begin RMDs at
age 73, while the applicable age increases to
75 for people born in 1960 or later. The first RMD generally has to be taken by April 1st of the year after the year you reach your required beginning age, and later RMDs are due by December 31st each year. Missing the deadline can lead to a
25% excise tax on the amount that should have been withdrawn, or
10% if the error is corrected in time. An RMD can be distributed in cash or securities, and eligible IRA owners can also use a qualified charitable distribution to satisfy all or part of an RMD.
The IRS provides a worksheet on its website for calculating the minimum amount that must be withdrawn each year.
E*TRADE, Schwab, and Fidelity have convenient calculators that can figure the amount with less effort.
How to Withdraw Money from an IRA at E*TRADE
E*TRADE is the lone broker in our survey to offer a unique IRA called the Complete IRA. This retirement account is only for people over age 59½ who already have a Traditional, Roth, Rollover, SEP, or SIMPLE IRA with the firm. Once one of these accounts is upgraded to the Complete version, every withdrawal is treated as an IRA distribution. Withdrawals can be made with a debit card, by writing a check, or through the broker’s free bill pay service. Federal and state income taxes are not withheld from these transactions.
The first checkbook order is free, and E*TRADE does not charge for standard check writing. The debit card is also free, and the account has no annual IRA fee or minimum balance requirement, although transaction fees, fund expenses, brokerage commissions, and service fees may apply. This appears to be the easiest way to withdraw money from an E*TRADE IRA if you’re over 59½.
The broker also provides a traditional IRA distribution request form, which can be used for non-Complete accounts. The form can be submitted online, or the PDF version can be completed and mailed to the broker. The form can be used for early withdrawals and required minimum distributions.
A one-time distribution is available, as are monthly, quarterly, semiannual, and annual withdrawals. Distributions can be made by check, ACH, or wire. Outgoing wires cost
$25.
E*TRADE IRA Distribution Summary
Withdrawing money from an IRA requires more paperwork than a taxable account usually needs. Taking money out before age 59½ creates even more
complications. Charles Schwab receives top honors for having a simple online form, while E*TRADE gets honorable mention for its Complete IRA.
Updated on 8/20/2026.
Continue Reading