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Early retirees who tap their traditional IRA or 401(k) before the age of 59 face a 10% early withdrawal penalty, unless they qualify for a limited number of exemptions. Contributions to a Roth, however, are taxed at the point of entry and can be withdrawn penalty free at any age. Hester and Bunge have a taxable brokerage account that they can tap without penalty, but they have to pay capital gains taxes on any appreciated stocks that they withdraw, whereas they generally wouldn have owed capital gains in a Roth..

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