| Even with health insurance, the out of your pocket costs for your
medical expenses may exceed your regular source of cash.
If you are looking to tap your retirement savings to support medical
expenses, here are some ways to reduce the tax bite on the distributions.
The IRS allows an exemption from the 10 percent early withdrawal
penalty when you use your retirement distributions to support certain
medical expenses. The medical expenses for your spouse and dependents
are also covered under the medical expense exemption. However, you
still will have to pay regular federal tax on the distribution amount.
Another alternative is to transfer your IRA or other retirement
account into a Self-Employed 401(K) plan and take a loan from that
plan. Loans from a 401(k) plan are tax-free and tax penalty free,
as long as the loans are paid back. If you have a small business
with no employees (i.e., you are a consultant, freelance worker,
and other self-employed individual) fill out the online application
form to get your free Self-Employed
401(k) plan kit. | 
