Sometimes you need to take distributions from your retirement assets earlier than expected.
For example, you may take early retirement, or be forced into retirement early due to a loss of employment. The IRS Section 72(t) provides rules that allow you to take distributions from an IRA or other retirement plans, prior to age 59 ½ without a 10% early withdrawal tax penalty.
According to Section 72(t), distributions before age 59 ½ can be exempt from early withdrawal penalties if the distributions are: 1) part of a series of substantially equal periodic payments (SEPPs) made at least annually, 2) are calculated according to one of three methods approved by the IRS, and 3) continue for five years or until the account owner reaches age 59 ½, whichever is longer.
We can discuss your options when it comes to taking early withdrawals and help you make the best choice in funding your goals.