How To Retire Early with a 72T || Retire Early & Avoid Penalties
In this podcast, I want to talk about retiring early with a 72T.
This video will help you understand what retirement looks like under the age of 59 1/2 and how you can retire and use your retirement investments for income without paying a penalty.
If you have most of your retirement assets in an IRA, simple IRA, or SEP IRA this retirement strategy will help you retire at 55 or retire at 50 or retire at any age under 59 1/2.
What is a 72T?
A 72T is an IRS rule that allows someone who wants to retire early to take substantially equal periodic payments from their IRAs and avoid the 10% early distribution penalty.
There are three methods for determining substantially equal periodic payments for retirement income with a 72T: amortization, annuitization, and required minimum distribution.
Once you begin taking retirement income from your IRA using a 72T, it must continue for five years or 59 1/2 which ever is longer. For example:
Start retirement income at 57–End at 62
Start retirement income at 52–End at 59 1/2.
You can split your IRA and have a 72T payment on one IRA while the other IRA is in deferral.
Please watch the retirement video above for an exact example on using a 72 tea for retirement income when wanting to retire early.
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