Close Close

Jeffrey Levine: 5 Secrets to Making the Most of a Last-Ditch Income Strategy

Your article was successfully shared with the contacts you provided.

Related: 6 New Findings on How Retirees Draw Down 401(k)s, IRAs: JPMorgan

There are times when clients must access funds in their tax-deferred retirement accounts earlier than the rules allow.

But except for a narrow range of situations that the IRS classifies as “emergencies,” the only way most Americans can access those funds without incurring a 10% early withdrawal penalty is by setting up a series of substantially equal periodic payments, otherwise known as 72(t) payments, according to Jeffrey Levine, chief planning officer at Buckingham Wealth Partners and lead financial planning nerd at

When clients opt to set up a SOSEPP schedule, however, they must adhere to several IRS rules or risk paying significant penalties, he pointed out Tuesday in the Kitces webinar “Utilizing 72(t) Payments to Avoid the 10% Early Distribution Penalty: Rules and Strategies.”

Check out the gallery above to see what Levine said are five key strategies that advisors should consider when discussing 72(t) distributions with clients.