If you’re planning for early retirement and have saved money in tax qualified accounts, there are some important considerations to be aware of. In this week’s episode of Grow Money Business, we are going to dive into how early retirees can avoid the 10% withdrawal penalty. Throughout the episode, we discuss the details of the early withdrawal penalty, some common misunderstandings about Roth IRAs, and the three options you can use to avoid the 10% withdrawal penalty when you decide to retire before 59½.
Show Notes
[01.02] Early withdrawal penalty – Grant explains the ins and outs of the early withdrawal penalty, which applies to distributions taken from an IRA or retirement plan before the participant is 59½ years old.
[05.15] 401k Distributions – Grant shares some important considerations if you plan to take distributions from your 401K before IRAs or Roth IRAs.
[10.45] Substantially equal periodic payments – Grant explains how you can avoid the early withdrawal penalty by utilizing substantially equal periodic payments.
[16.15] Taxable Brokerage Accounts – Grant shares a third maneuver for avoiding the early withdrawal penalty that allows tax-deferred accounts to grow and compound.
[20.16] Roth IRA Myths – Grant clarifies some common misconceptions regarding the five-year ROTH IRA rule.
Resources
72t Distributions: The Ultimate Guide to Early Retirement –
https://www.abovethecanopy.us/the-ultimate-guide-to-early-retirement-with-72t-distributions/
Substantially Equal Periodic Payments –
https://www.irs.gov/retirement-plans/substantially-equal-periodic-payments
Exceptions to Tax on Early Distributions –