Kaylani is 52 years old and makes a nonqualified withdrawal of $⁢7,000 from their traditional IRA. What is the total penalty amount they will incur, excluding any income taxes?

At age 52, Kaylani is younger than 59½, so a nonqualified traditional IRA withdrawal generally incurs a 10% early-withdrawal penalty. Ten percent of $7,000 is $700. Excluding income taxes, the penalty is $700.

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