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How to Use 72t Distributions to Access Retirement Funds Early and Penalty-Free

James · July 26, 2022 · Leave a Comment

In this episode of Ready for Retirement, James discusses Rule 72t distributions to access retirement funds early and penalty-free.

Check out the podcast on YouTube here!

Questions Answered: 

  • How can you withdraw funds from retirement accounts early?
  • What’s the best strategy to execute the Rule 72t distributions?
  • How does utilizing the Rule 72t impact the overall financial strategy?

Key Points:

  • If you leave your employer in the year you turn 55, you can draw from and avoid the 10% early withdrawal penalty (still owe taxes)!
  • Substantially Equal Periodic Payments: there are three different ways to calculate this and you can select which makes most sense for you.
  • All withdrawals are still taxable income, you’re just avoiding the 10% early withdrawal penalty. How does this impact your overall tax strategy?
  • It often makes sense to not implement the 72t distribution if you have other taxable accounts to pull income from.

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Podcasts financial, financial independence, retire, Retirement, retirement planning

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