The 10% early withdrawal penalty from an IRA can be waived for?

The correct answer highlights that the 10% early withdrawal penalty from an IRA can indeed be waived under certain circumstances, one of which is for catastrophic medical expenses. This provision allows individuals to access their retirement savings without incurring the penalty if they face significant medical costs that exceed a certain percentage of their adjusted gross income. This is particularly important for individuals who might find themselves in critical financial situations due to severe health issues.

Other options, while they may have certain provisions for penalty waivers, do not align with the specific criteria set out by IRS regulations concerning early IRA withdrawals. For instance, purchasing a new home, while allowing penalty-free distributions from certain plans like a Roth IRA, does not apply to traditional IRAs in the same way. Similarly, higher education expenses can qualify for penalty-free withdrawals from IRAs, but this does not encompass all situations related to early withdrawal. Unemployment compensation, while it can impact one's financial situation significantly, does not provide a direct reason for waiving the 10% penalty as related to IRA withdrawals. Thus, the focus on catastrophic medical expenses accurately reflects a specific IRS guideline for penalty exemption.