The Rule of 55: A Practical FAQ for Early Retirees What it is, who actually qualifies, and the planning questions worth thinking through before you tap your 401(k) early. If you are thinking about leaving your employer in your mid-50s, the Rule of 55 is one of the more useful, and most misunderstood, provisions in the Internal Revenue Code. Used correctly, it lets you draw on a workplace retirement plan years before age 59½ without the additional 10% early-distribution tax. T

An excellent but not technically easy to digest article I recently read on 72t/SEPP withdrawals from Kitces.com: https://www.kitces.com/blog/rule-72t-sepp-calculate-payments-rmd-avoid-penalty-tax-early-ira-withdrawals-notice-2022-6/ Notice 2022‑6 quietly made 72(t) / SEPP plans more usable for early retirees by modernizing how “substantially equal periodic payments” are calculated. The IRS now allows a higher interest rate (the greater of 5% or 120% of the mid‑term rate) when

Using the 72(t) / SEPP Early Withdrawal Exception for Early Retirement If you’re thinking about retiring before age 59½ and most of your wealth is in IRAs or other qualified accounts, you’ve probably run into a frustrating problem: the 10% early withdrawal penalty. The IRS does offer a way around that penalty—the 72(t) substantially equal periodic payment (SEPP) exception—but it comes with a lot of fine print and very little room for error. For some early retirees with high q

For an immediate spending need, you don’t always have to immediately sell investments - it can be advantageous to avoid the capital gains tax hit if the cashflow need is more temporary. Three common options for higher‑net‑worth households are: Home Equity Line of Credit (HELOC) Securities‑Backed Line of Credit (SBLOC) 401(k) loan They all are viable options worth considering but they leverage different assets and carry different risks. HELOC: Borrowing Against Your Home A HEL