Early Retirement

Voluntary Retirement? ~ Termination? ~ Lay-Off? ~ Buy-Out?

Options before Age 59
Avoiding the 10% Penalty Tax on Early Withdrawals

Internal Revenue Code (IRC) Section 72(T)

There is a 10% penalty tax imposed on distributions that are not part of a series of "substantially equal periodic payments."  Employees may now take distributions prior to the age 59 without the 10% penalty tax by meeting certain criteria within section 72(T) of the IRS Code.

There are methods that satisfy the "substantially equal periodic payments" test such as taking distributions over a 5 year period of time or by age 59, whichever is later.  Example:  Age 56 - Distributions must be taken for 5 years or up to age 61.  We will explain these in detail when completing the needs evaluation.

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