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Withdrawing from IRAs, 401k
Old 04-28-2005, 10:27 AM   #1
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Withdrawing from IRAs, 401k

Isn't the minimum age to withdraw from these retirement accounts 59.5 or something like that? So if one was to retire early, say like at 45, you would have to wait all that time to start taking money out without penalty? Or would there be a way around that for early retirees?

Thanks!
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 10:34 AM   #2
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Re: Withdrawing from IRAs, 401k

Theres an IRS statute that allows early withdrawal from retirement accounts. I forget the name. You have to divide the account up into equal annual withdrawals and then stick with that schedule. Theres something in the FAQ about it.
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 10:37 AM   #3
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Re: Withdrawing from IRAs, 401k

oh ok, thanks, i'll look that up.

I know also Roths offer other exceptions right? Catastrophic medical bills, 1st home purchase, i think. Also, can't you deduct your contributions from the Roth at any time? IT's just your gains that would be penalized and taxed?
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 10:39 AM   #4
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Re: Withdrawing from IRAs, 401k

I think those situations are true of all retirement accounts.

You can always take a distribution and pay any applicable taxes and penalties. For dire circumstances, the penalties are sometimes waived.
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 10:47 AM   #5
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Re: Withdrawing from IRAs, 401k

Quote:
Theres an IRS statute that allows early withdrawal from retirement accounts. *I forget the name. *You have to divide the account up into equal annual withdrawals and then stick with that schedule. Theres something in the FAQ about it.
I think it's called SEPP, Substantially Equal Periodic Payments.

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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 10:49 AM   #6
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Re: Withdrawing from IRAs, 401k

Thats the one

http://www.investopedia.com/articles.../02/112602.asp
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 04:30 PM   #7
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Re: Withdrawing from IRAs, 401k

And note that even though SEPP's are not allowed on a 401k, there's no reason you can't roll over the 401k into an IRA and then do the SEPP. This realization completely changed my ER thinking.
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 04:33 PM   #8
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Re: Withdrawing from IRAs, 401k

Quote:
And note that even though SEPP's are not allowed on a 401k, there's no reason you can't roll over the 401k into an IRA and then do the SEPP. *This realization completely changed my ER thinking.
yea, that is a good point
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 05:35 PM   #9
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Re: Withdrawing from IRAs, 401k

It's certianly my road map! 72(t) rule! I'm hoping to start saving in after tax accounts in a couple of years along with the Roth and 401(k) maxing. I'd like to hedge my bets on future tax rates as much as possible, since current rates are so low.
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Re: Withdrawing from IRAs, 401k
Old 04-28-2005, 06:07 PM   #10
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Re: Withdrawing from IRAs, 401k

Yeah, back in 1993 I studied it from every angle
(early withdrawal from IRA). I was sure I would have to do it. Twelve years later and I haven't touched it yet.
Now at age 60, I can take it whenever. It's become
a sort of challenge to see how long I can go.

JG
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