Frequently Asked Questions

If you separate from service in the calendar year in which you turn 55 or later, you may be able to take distributions from your 401(k) penalty-free. However, income taxes will still apply. If you would like help properly structuring your early retirement, please contact us today

Learn more about the 72(t) exception which allows an employee who retires, quits, or is fired at age 55 to withdraw without penalty from their 401(k). Learn the three key points that early retirees need to know.

All signs point to yes and it is often approved. If you would like help properly structuring your early retirement, please call us today.

Absolutely! You can start the stream of income with no penalties or hassle with the IRS, assuming you structure the distribution properly. If you want help with your early retirement, please contact us today.

We can shift and dissect your portfolio to make the 72(t) option a valuable contributor to your early retirement. If you would like help properly structuring your early retirement, please call us today.

Yes, under certain circumstances. If you would like help properly structuring your early retirement, please call us today.

You might be able to use your IRA assets for a short period of time using a 60-day rollover. However, you must follow the rules carefully to avoid paying a penalty. If you would like help properly structuring your early retirement, please contact us today.

The answer is no, but in many cases, we recommend that you do. If you would like help properly structuring your early retirement, please call us today.

The answer is yes. By taking income through a 72(t), you are not avoiding income tax, but you are avoiding the 10% early withdrawal penalty. If you would like help properly structuring your early retirement, please contact us today.

There are three standard methods the Internal Revenue Service allows us to use in determining a 72(t) SEPP: the amortization method, the annuitization method, or the required minimum distribution method. We can help you determine which method will efficiently generate the income that you want or need. If you would like help properly structuring your early retirement, please contact us today.

Learn more about hardship exceptions. This is an emergency measure and you have to demonstrate real need. If you would like help properly structuring your early retirement, please contact us today.

The most common way is establishing a series of Substantially Equal Periodic Payments. If you would like help properly structuring your early retirement, please contact us today.

72(t) distributions are not applicable to a Roth IRA, as the dollars that were originally contributed to the Roth have already been taxed. You can structure a 72(t)-like distribution from these annuities. This strategy is specifically referred to as a 72(q) distribution. If you would like help properly structuring your early retirement, please contact us today.

There are three tables that could be used to determine life expectancy. The most common table used is the Uniform Life Table. The maximum 72(t) interest rate allowed is the greater of 120% of the federal mid-term annual rates of the 2 months immediately preceding the month that you start the distributions. Please note this is not the interest rate to expect on the actual investment that the 72(t) IRA distribution is coming from. If you would like help properly structuring your early retirement, please contact us today.

You can open multiple retirement accounts and can choose to only apply the 72(t) distributions to just one of your retirement accounts, not all of them. This can most times be a complex process. We have a highly trained and experienced staff to assist and oversee that this is done in the proper manner. A mistake here could be very costly. If you would like help properly structuring your early retirement, please call us today.

This depends on whether you still work for the company where your 401(k) is. Watch this video for more details. If you would like help properly structuring your early retirement, please contact us today.

There are several possible reasons, as discussed in this video. This is an area that we specialize in and can offer guidance and counseling. If you would like help properly structuring your early retirement, please contact us today.

There are several ways you can bust a 72(t) distribution and the consequences can have a severe impact on your taxes if the account is not managed properly. If a fault occurs, the IRS will assess the penalty tax on your latest distribution and retroactively assess the tax on all distributions taken plus interest. This is why it’s so important to work with an experienced specialist when establishing a 72(t) distribution. Most investment advisory firms, as well as most accountants, attorneys, and bankers, are not very familiar with this strategy and many choose to avoid it altogether due to the complexities and potential implications. If you would like help properly structuring your early retirement, please call us today.

72(t) is the Internal Revenue code section that covers withdrawals from retirement accounts: 401(k)s, 403(b)s, including qualified annuities, pensions, individual retirement accounts (IRAs) or any other deferred retirement savings vehicles. 72(t) lists some exceptions to the age 59 ½ rule, where you can access some of your retirement dollars prior to age 59 ½ without paying the 10% penalty tax. The most frequently utilized exception is establishing a series of Substantially Equal Periodic Payments. If you would like help properly structuring your early retirement, please call us today.

Rollover is a term that is used when transferring money from one retirement account to another to maintain its tax-deferred status. If you would like help properly structuring your early retirement, please call us today.

We cannot answer this question without having a conversation with you and obtaining a comprehensive understanding of your goals, objectives, financial picture, investment experience, and risk tolerance. The expected rate of return will depend on the investment choices that we deem fit for your retirement game plan once we have reviewed and understood your personal information, situation, and goals. If you would like help properly structuring your early retirement, please call us today.

There are many different investment options that we can discuss with you and there are 3 steps in this process. If we are managing the account and payments for you, there is no additional fee for us to work on this for you. This is not a do-it-yourself project for many reasons. Please ask us about our no-fee, no-risk option, which can be used as part of a properly structured 72(t) income plan. We can help you. If you would like help properly structuring your early retirement, please call us today.

Starting at age 59 ½, you can begin taking money out of your retirement account without penalty. Keep in mind that you will still have to pay any federal or state taxes that might be due. Under some circumstances, you may be able to avoid the penalty on early withdrawals. If you would like help properly structuring your early retirement, please contact us today.

The standard age for taking money out of your 401(k) plan is age 59 ½. There are other situations where you can withdraw cash out of your 401(k) plan before the age of 59 ½ without paying a penalty. If you would like help properly structuring your early retirement, please contact us today.

We Are Specialists. We Can Help.

Would you like a personalized estimate of the amount of penalty-free income your 401(k), TSP, 403(b), 457 plan or IRA can generate using the IRS Rule 72(t)?

Simply provide us some basic information by clicking the button below and one of our 72(t) Specialists will contact you to provide a personalized estimate for your review.

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