When it comes to money, simpler is always better. When it comes to retirement, simpler is not only better, but crucial. Luckily for you, when it comes to these withdrawal rules, simpler is key. The IRA withdrawal rules are few and easy to understand, despite what you may have heard from other people.

The first thing you should know about IRA withdrawal rules is the number 59 ½—this number is not as random as you may think. This is generally the age at which you get to start withdrawing funds from your IRA. If you so choose, you may delay withdrawing funds until you reach the age of 70 ½. Most people do this in an attempt to maximize their retirement savings.

Both withdrawing money early and failing to withdraw funds can both cost you money, however. Those who withdraw funds before they reach the age of 59 ½ are penalized 10%. Likewise, those who are over the age of 70 must withdraw at least their RMD annually; otherwise, they will be penalized 50% the amount that should have been withdrawn minus the amount that was withdrawn. An RMD is a Required Minimum Distribution—the amount of money you have to take out of your IRA every year. This number is calculated by dividing your life expectancy (as determined by the IRA in its Uniform Life Expectancy table) by your account balance as it stands at the beginning of the year.

The IRA withdrawal regulations listed above are all that most people need to know about in order to take care of their retirement. However, circumstances outside our control cause problems in the best-laid-out plans, so exceptions have been made to the IRA withdrawal rules. The exceptions outlined below refer to withdrawing funds only. In the event that you become disabled, or that your or your spouse dies, the IRA allows you to either withdraw funds early or transfer funds to your beneficiary. Early withdrawal is also acceptable for medical expenses, domestic relations orders, tuition and education expenses, and for “first-home” purchase. If you have more specific questions, please talk to your IRA agent.

In addition to the IRA withdrawal rules listed above, there is one more item that you ought to be aware of. Because there are annual limits to the amount you can contribute to your retirement savings, you cannot make up any of your withdrawals. For example, if you withdraw $4000 now to help cover the expenses of school, you can not re-contribute that money later that year—once it leaves the account, it can’t be replaced.

This article has outlined the basic IRA withdrawal rules. If you don’t remember anything else from this article, remember the number 59 ½ and the number 70 ½—if everything goes well, you will not need to withdraw funds before you are 59 ½ and you won’t be penalized if you start withdrawing funds before you are 70 ½—these numbers are the key to the simplicity of the IRA rules.