In this episode of 'Retire with Style', hosts Alex Murguia and Wade Pfau with Jessica Wunder from McLean Asset Management delve into the complexities of early withdrawals from retirement accounts, specifically IRAs and 401(k)s. They discuss the penalties associated with early withdrawals, the Rule of 55, and various exceptions allowing penalty-free access to funds. The conversation highlights the differences between IRAs and 401(k)s, including specific exceptions applicable to each type of account. In this conversation, the speakers discuss the new exceptions introduced by Secure Act 2.0, including emergency withdrawals and disaster recovery relief. They delve into various early withdrawal exceptions, such as those for death, disability, and medical expenses. A significant focus is placed on the 72T approach, which allows for early withdrawals without penalties under specific conditions. 

Takeaways

• The Rule of 55 allows penalty-free withdrawals from 401(k)s after age 55.


• Public safety employees have unique exceptions for early withdrawals.


• You can withdraw for medical insurance premiums if unemployed.


• Educational expenses can be covered by early withdrawals from IRAs.


• The 72(t) strategy allows for substantially equal periodic payments.


• There are strict rules governing early withdrawals from retirement accounts.


• Early withdrawal exceptions include death, disability, and medical expenses.


• The 72T approach allows for substantially equal payments from retirement accounts.

Chapters

00:00 Introduction and Guest Introduction

01:38 Understanding Early Withdrawals from Retirement Accounts

04:02 Exploring the Rule of 55

11:09 Exceptions for IRAs vs. 401(k)s

15:57 Common Exceptions for Early Withdrawals

18:00 New Exceptions in Secure Act 2.0

22:00 Understanding Early Withdrawal Exceptions

30:00 The 72T Approach Explained

35:59 Planning for Retirement Cash Flow Needs

Links

Click here to download Retirement Researcher’s free resource, “Exception to Early Withdrawal Penalties“: https://retirement-researcher.ontralink.com/tl/476

We’re hosting another YouTube LIVE Q&A episode for RWS! Click here to submit your questions: www.retirementresearcher.com/ask

Watch this episode on YouTube: https://youtu.be/EzdIgudCkPQ?feature=shared

The Retirement Planning Guidebook: 2nd Edition has just been updated for 2024! Visit your preferred book retailer or simply click here to order your copy today: https://www.wadepfau.com/books/ 

This episode is sponsored by McLean Asset Management. Visit https://www.mcleanam.com/retirement-income-planning-llm/ to download McLean’s free eBook, “Retirement Income Planning”