Early withdrawals from IRAs to help “first-time” home buyers are penalty-free. IRA owners can take out up to $10,000 to help buy or build their primary home or one for a spouse, child, grandkid, parent or grandparent. The funds must be spent within 120 days. You can be a first-time homeowner even if you owned a home before, as long as you and your spouse didn’t own a home in the previous two years. Ditto for cost of higher education…college tuition, books, computers, supplies, and room and board for students enrolled at least half-time. Unlike for home buyers, there’s no dollar cap. To qualify for the exception, payouts must cover education costs for the IRA owner, spouse, child or grandkid that are paid in the year of the withdrawal. Early distributions from 401(k)s for education or first homes don’t get relief. Taking substantially equal payments from an IRA or 401(k) is a key exception. Distributions must continue for the longer of five years or until the recipient hits 59½. Withdrawals must be based on the owner’s life expectancy or the joint life expectancy of the owner and named beneficiary. If the payouts vary too much from year to year, all previous distributions taken from the account will be hit with the 10% tax.