IRA could help fund master's degree - but what about tax penalty?

DEAR HARRY: I am 32 and left my government job at the end of July. I have never had another job, and I enjoyed it for a long time. Now I want to improve myself and get a master's degree in social work. Much of my work has been in that area, and I know I'll love the college courses and a new job when I'm out. I have about $24,000 from my state pension plan, and about half that much in an IRA. I know that there's some kind of tax penalty if I take this money out before I'm 59 1/2, but I need the details so I can plan my tuition payments. I'm all ready to start my program this month.

WHAT HARRY SAYS: An early-withdrawal penalty of 10 percent is in addition to the regular income tax. However, there are exceptions, one of which provides for higher-education expenses. These include tuitions, books, supplies and equipment as well as room and board for a student who is at least a half-timer. The break is given only if the withdrawal is made in the same calendar year as the payments. From time to time, Congress does get things almost right. Wouldn't it have been great if the income tax also were waived?

write to him at Daily News, 801 Market St., Philadelphia, PA 19107.

Harry urges all his readers to give blood. Contact the American Red Cross at 1-800-Red Cross.