I Can’t Take Money Until 59 1/2

Media / Blog

I Can’t Take Money Until 59 1/2

Prev

Protected: 11/4/14 – Who Wants The Pre-Nup More? Men or Women?

October 31, 2014

There is an ever-changing landscape of families and individuals who are working on making work-optional by the age of 50 or 55. This doesn't mean that they won't continue running some small business or choosing projects to work on that they really enjoy, but at this financial juncture in their lives they are wondering how they may be able to tap into their retirement savings accounts. The biggest misconception people have about retirement savings accounts is that they simply cannot touch the money before the age of 59 ½ or they will pay significant penalties to the IRS.

You'll want to check this IRS link out. (http://1.usa.gov/1rB1ufw) Essentially, IRA owners have an option called Substantial Equal Period Payments which would allow them to withdraw money from their IRA or qualified plan before the age of 59.5 without incurring the IRS 10% early withdrawal penalty. The IRS will require individuals to continue the SEPP program for a minimum of five years which can make 55 a very attractive age to begin these types of withdrawals. Sometimes, you'll hear financial or tax advisors discuss this as a Regulation 72(t) distribution that falls underneath the tax code.

In addition, individuals considering early retirement may want to learn more about the rule of "55" as it pertains to their 401(k) plan at work. Employees who quit, get fired, or retire at the age of 55 can withdraw funds from their 401(k) without paying the IRS penalty as well. This rule is different than what applies to IRA accounts, so you will want to closely review this option within this particular retirement savings account ,especially if you are considering rolling the 401(k) into an IRA account.

If you are considering an 'early retirement' and are worried about whether or not you can access your retirement accounts, don't get scared away by the common misconception that you'll have no access to this money until 59 ½. Do some prudent planning to make sure you won't outlive your money and perhaps you too can walk away from your job before you turn 59 ½.

What's the most misunderstood investment term today?

Written by: Ted Jenkin
Request a FREE consultation: www.oxygenfinancial.net


If you would like to receive more information on making smart money moves for your future, be sure to contact us today!

Next

7 Ways to Cut your Cellphone Bill

Sign Up

Sign up for our exclusive Sunday Paper with a weekly market commentary, insightful personal finance blogs, and life changing education guides.

Email sign up

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice. https://Bit.ly/KF-Disclosures

This site is published for residents of the United States only. Registered Representatives of Kestra IS and Investment Advisor Representatives of Kestra AS may only conduct business with residents of the states and jurisdictions in which they are properly registered. Therefore, a response to a request for information may be delayed. Not all products and services referenced on this site are available in every state and through every representative or advisor listed. For additional information, please contact Kestra IS Compliance Department at 844-553-7872.

PLEASE NOTE: The information being provided is strictly as a courtesy. When you link to any of the web sites provided here, you are leaving this web site. Kestra IS and Kestra AS makes no representation as to the completeness or accuracy of information provided at these web sites. Nor is Kestra IS and Kestra AS liable for any direct or indirect technical or system issues or any consequences arising out of your access to or your use of third-party technologies, web sites, information and programs made available through this web site. When you access one of these web sites, you are leaving our web site and assume total responsibility and risk for your use of the web sites you are linking to.