How To Take Distributions From Your IRA Without Paying The 10% Penalty

If you are considering retiring early or you need income before age 59½, the IRS 72(t) rule (also called SEPP, Substantially Equal Periodic Payments) may allow you to take distributions from a traditional IRA without the 10% early withdrawal penalty.

In this episode, Ken and Jeremy break down what an IRA is, who 72(t) can help, the three calculation methods, and the most common pitfalls that can trigger penalties if you change or break the plan. You will also hear an example using a $1,000,000 IRA and a planning strategy that may help you match the income you need.

00:00 Intro: the 10% early withdrawal penalty problem
01:10 What an IRA is (traditional vs Roth)
03:05 What is 72(t) SEPP and who it is for
05:00 The big rule: duration and no changes allowed
07:10 Method 1: RMD method (flexible, recalculates)
10:20 Methods 2 and 3: amortization vs annuitization
13:40 Example, interest rate limits, and top mistakes to avoid

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