LaunchPoint

Life happens, circumstances change. Life is short. Time is valuable. Nobody looks back on their life and says, “I wish would have spent more time working.” Usually, people look back and say, “I wish I would have spent more time with my kids,” or “I wish I would’ve made better decisions with my money,” or “I wish I would have taken better care of myself,” etc.

The largest sum of money that most people have besides the equity in their home (or the value of their business if they are business owners) is their 401(k)/IRA/Pension/TSP/403(b)/Deferred Compensation, or other Qualified retirement plan. We are often asked, “Can l utilize my IRA/401(k) to retire early, start a business, or improve the quality of my life?”

The answer is, “Yes”. Anyone at any age can utilize IRS Rule 72(t) SEPP to create penalty-free income from their IRA if they are under age 59½. The IRS has various rules and guidelines, and setting up a 72(t) SEPP  properly should be done by very carefully and diligently since any mistake can be very costly and cause significant IRS tax issues and problems.

Why would people want to access their money prior to 59½? There are a lot of reasons. Everyone has a different story, and everyone has different dreams and goals, circumstances and situations. Some of the reasons our clients come to us with are:

1. Start a Business
2. Buy Real Estate
3. Qualify for a Mortgage
4. Debt Elimination Planning
5. Tax Bucket Planning
6. Work Optional Lifestyle
7. Early Retirement
8. F.I.R.E. Movement (Financially Independent, Retire Early)
9. Proactive Tax Planning (Expectation that Taxes will be higher in the future)

The above list is not comprehensive. Again, every situation is different and unique. We get calls and inquiries from individuals across the country every single day asking us for help in this specialized area. We continue to be amazed at the lack of advice that people are being offered, and our company mission drives and motivates us each day. “We help ensure the long-term financial security of our clients and their families by incorporating creative and thoughtful wealth protection strategies consistent with our clients’ unique goals and objectives.”

Utilizing IRS Rule 72(t) SEPP is not for everyone. In our private practice, we operate under a fiduciary standard. This is a specialized area of financial planning that requires careful thought and execution.  Once we understand the entire financial picture, we can make an appropriate recommendation and we often suggest that people do not utilize 72(t) SEPP assuming there is a better idea or strategy.