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Penalty-Free 72(t) SEPP income planning

As 72(t) professionals, we have methods to distribute from retirement accounts, before age 59 1/2, for multiple purposes including full retirement, the starting of a new business venture, conversion of a hobby into a full-fledged business, as well as investment in non-traditional devices; all through the use of "Substantially Equal Periodic Payment Plans", also frequently called SEPPs, 72(t) plans or early retirement distribution plans.

The 72(t) SEPP Plan

Remember the old adage: "measure twice, cut once [otherwise you will be spending a lot of money at Home Depot]. Here we do not measure twice — we usually measure ½ dozen times for several reasons:

  • We design distribution plan(s) that fit you today! Here we use a building block approach so that it works in the context of your living expenses and other financial objectives.
  • Your financial needs will absolutely change over time. Therefore, we design plans that cause different financial outcomes in future years that end-run the "modifications" claw-back and re-application of the 10% surtax plus interest.
  • We design plans and keep designing until you say:"Ah Ha, I see how all the pieces fit together!" When you say it, planning is done, but not until then.
  • Once the 1st distribution from an IRA is made, virtually 100% of your planning opportunities are erased. Further, there are no provisions for a back-up and do over. You get one swing and one swing only — with the right help it can be a home run.

Download: "A Practical Guide To Substantially Equal Periodic Payments And Internal Revenue Code §72(t)" 5th edition