Qualified retirement accounts such as 401(k)s and IRAs provide tax deferred retirement savings. Because of the tax advantage, the IRS wants to limit the use of these accounts for retirement savings only.

If funds from these accounts are accessed before age 59 1/2 the IRS assesses a 10% penalty. Internal Revenue Code section 72(t) is the only exception to this rule.

This technique is also called a series of Substantially Equal Periodic Payments or SEPP.

Locate your IRA statements. Have all of your retirement savings accounts in front of you so that you can make the best decision about how to structure your 72(t).

Determine how much income you need before age 59 1/2. Sit down with your budget and figure out exactly how much annual income you will need. 

Do not use a monthly budget as all 72(t) calculations are made in annual numbers. Using a monthly number can cause you to break the 72(t) and incur an IRS penalty.

Find a 72(t) calculator online or consult a CPA for the calculations. 

A 72(t) calculation involves some complex math and an automated software calculator or CPA should be used. or a professional in this area to help you.

Compare your budgeting needs from your total account values and allow for exceptions, then after evaluating  select the best 72(t) strategy to meet your needs.

Speak with a professional , this is  most important.

If you are considering Retirement Planning, call for a free consultation today.