4 ways to fund an early retirement penalty-free
· 12 min · Episode 1024
Episode 4 ways to fund an early retirement penalty-free
1024. Are you ready to quit working or to begin a financially independent lifestyle? Laura covers four ways to access your retirement funds without paying a hefty 10% early withdrawal penalty before 59.5.
Key takeaways
• Using a tax-advantaged retirement account has many benefits, but one downside is typically paying a 10% penalty for withdrawals before age 59.5. • The rule of 55 is an IRS rule that allows employees to take penalty-free retirement plan distributions when they leave during or after the calendar year of their 55th birthday. • With a Roth IRA, you can withdraw your original contributions at any age, for any reason, entirely tax- and penalty-free. • A SEPP or 72(t) payment plan is an IRS rule that allows you to take equal distributions from a retirement account penalty-free, no matter your age, if you follow strict guidelines. • A brokerage account allows you to take distributions penalty-free, no matter your age, but doesn’t offer the tax perks of a retirement account.
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