What must a participant in a traditional IRA do to avoid penalties related to distributions?

To avoid penalties related to distributions from a traditional IRA, an individual must withdraw funds at age 59½ or later. This age is significant because the IRS imposes a penalty of 10% on early withdrawals made before turning 59½, in addition to any ordinary income taxes due on those distributions.

Reaching this milestone allows individuals to access their retirement savings without incurring these additional penalties. By respecting this age limit, individuals can ensure they are compliant with IRS regulations, maintaining the tax-advantaged status of the IRA for their retirement planning.

Other options are linked to different aspects of IRA regulations but do not directly relate to avoiding penalties for distributions. For instance, withdrawing funds after age 70½ pertains to required minimum distributions, and contributing a minimum amount each year does not involve distribution penalties but rather focuses on contribution requirements.