A Penalty-free, Early Retirement Strategy Without All The Complexity

(don’t forget to checkout the video of this blog too)

You’ve done a great job saving & investing for the past few decades and you have put yourself in a wonderful position to be able to retire early

You’ve got a brand new set of swim trunks and flip-flops ready to go.

You can see yourself sailing the Caribbean with a Pina Colada in your hand.

You can already feel the cool sea breeze on your face.

There’s just one little problem….

The vast majority of your money is locked inside of traditional retirement accounts.

This is a bit of a problem, right⁉️

The IRS has created a big roadblock for you that seriously limits the accessibility of your money prior to 59–1/2.

In fact, taking money out of traditional retirement accounts not only is taxable, but it also incurs a very heft and unnecessary 10% penalty.

Paying this penalty puts a lot more stress on your retirement assets than is necessary.

In fact, it very significantly increases the risk that your money won’t last all the through retirement.

So, we definitely want to avoid this penalty.

But, how?!

Well, there’s a little loophole in the IRS tax code…

It’s called a 72t and I’ve done videos on how to execute one of these for yourself so that you can access retirement funds penalty-free!

In fact, you can execute a 72t Strategy as early as you want (which a lot of people don’t know).

There are also ways to execute a 72t to completely remove the complexity and uncertainty.

First, let’s quickly review some details of how a 72t works (and it’s limitations):

✅ A 72t allows systematic, early withdrawals from retirement accounts (without penalties)

Once these payments start they cannot stop until you either reach age 59–1/2 or until at least 5 years have passed (whichever is longer).

If you stop taking payments or miss one all of the distributions that came out penalty-free will still be penalized!

✅ There are 3 methods for calculating your systematic withdrawal (and it’s up to you to get it right)

You can either use the amortization method, the minimum distribution method, or the life expectancy method.

These must be constantly recalculated to ensure that you are taking an appropriate distribution so that the pesky 10% penalty doesn’t resurface unexpectedly!

It sounds a bit complicated because it is!

But there are better ways to structure a 72t to remove the guesswork.

And the best way to do this is by utilizing 2 different types of annuities.

Now, why annuities?!

Because a 72t needs to be done as a structured payment and an annuity is a vehicle designed specifically to provide structured payments that can last for a set period of time, or for life.

So annuities make this process much easier.

Here’s how it’s done:

Step 1: Purchase a fixed, period-certain income annuity

This annuity will be designed to only make payments for the period needed to execute the 72t strategy.

At the end of that period the annuity will have $0 in it…

But don’t worry there’s a second half to this equation.

Step 2: Purchase a mirrored, guaranteed-rate annuity

There’s a bit of math involved to determine how much you need to contribute to this annuity (based on interest rates at the time of execution)…

But the idea is that this contract matures exactly when the other annuity contract is exhausted.

The guaranteed-rate annuity then provides a full, 100% principal replacement of the first annuity that can now be used in any way necessary for your Retirement Income Plan moving forward.

The best part about this strategy is that every element of it is guaranteed.

Meaning the income payments are guaranteed to be exactly what you need, for exactly as long as you need them, while the guaranteed-rate annuity grows at exactly the rate needed to fully replace the account that was exhausted during the execution of the 72t.

This gives you a foolproof way to leverage the powerful guarantees of an insurance company to pull money out of your retirement accounts early…

Without penalties…

AND, without all of the messy calculations involved with a 72t Strategy.

Let’s Chat 💬😎