How to Get Money Out of Your Retirement Accounts Before 59.5 for Early Retirement RPF0104
Radical Personal Finance
Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP
4.2 • 1.9K Ratings
🗓️ 17 November 2014
⏱️ 75 minutes
🧾️ Download transcript
Summary
I've done a number of interviews on the show with early retirees and early retiree hopefuls. One common theme is that many of them are using traditional retirement accounts but are planning to retire before 59.5.
How is that possible without paying a bunch of penalty tax?
Today, I share with you the answer to that question.
- They may not actually take distributions from the retirement accounts.
- They might pay the 10% penalty tax because it's cheaper than the alternative.
- They might do a Roth Conversion Ladder
- They might use the 72(t) SEPP rules.
Enjoy the show!
Joshua
Links:
- New York and California state income tax rates.
- Dinkytown 72(t) calculator
- Kitces article on Bobrow v Commissioner
Transcript
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| 0:00.0 | New from DurX, 7 different vibrations you'll want to put on repeat. |
| 0:15.0 | Now available at boots and at duerX.co. UK. |
| 0:20.0 | I've gotten a lot of questions with all of the early retirement interviews I've played on this show |
| 0:25.8 | about how all these people are going to access the money that they have stuffed away in retirement |
| 0:31.1 | accounts if they retire before the age of 59.5. |
| 0:35.0 | After all, aren't they going to have to pay the penalty tax to get their money out? |
| 0:39.0 | Today I'm going to answer that question and give this show a shot. |
| 0:43.3 | Whether you're a beginner or an expert on this subject, |
| 0:46.2 | I think I might have some ideas that will help you. So, Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets. Thank you for being here. |
| 1:11.0 | Today is Monday, November 17, 2014 and today I'm going to tell you why |
| 1:17.1 | you might not pay the penalty taxes even if you retire before 59.5 and then I'm |
| 1:21.7 | going to tell you how to avoid them all if you want to. |
| 1:24.0 | Give you all the answers for that. |
| 1:26.0 | Today's going to save you to do me a |
| 1:45.1 | favor, give today a shot. I'm going to try to do this with a minimum of detail |
| 1:49.6 | meaning I'm not going to get down to the technical weeds. I'm going to try to answer this big picture with just enough detail and then let me know how I did. I'm pretty excited about it. I feel like I can do it. |
| 2:01.0 | Two quick announcements as we start. |
| 2:03.0 | Number one, as I've been saying for the last week, |
| 2:05.6 | I wound up deleting all of you who are subscribed |
| 2:08.1 | to my show in iTunes. |
| 2:09.4 | It was accidental. |
| 2:10.3 | Trust me. |
... |
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