Video Title: 3 ways to fund early retirement before the age of 59 1/2 without paying an IRS penalty!
Channel: Rewire-Retire
Speakers: Walter
Duration: 00:09:30
Introduction
This video discusses three methods to access retirement funds before age 59 1/2 without incurring IRS penalties. The speaker, Walter, explains these options for those seeking early retirement.
Key Takeaways
Rule of 55: If you are age 55 or older and leave your job, you can withdraw funds from your employer-sponsored 401(k) or 403(b) without penalty. This requires checking with your HR department to verify plan eligibility.
Roth Conversion Ladder: A series of partial Roth conversions over several years (ideally 10+) allows tax-advantaged access to funds after a five-year waiting period. This involves transferring pre-tax money to a Roth IRA, paying taxes, then accessing the converted amount penalty-free after five years.
72(t) Distributions: This IRS rule permits withdrawals based on a series of substantially equal periodic payments, calculated using one of three IRS-approved methods. This method requires a minimum withdrawal period of five years or until age 59 1/2 (whichever is longer) and carries significant risk due to complexity and potential penalties for errors.
