Navigating 72T Distributions and Early Retirement | 14min snip from BiggerPockets Money Podcast

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560: Dude ACTUALLY Withdraws From His 401(k) and Retires at 47

BiggerPockets Money Podcast

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CHAPTER

Navigating 72T Distributions and Early Retirement

This chapter focuses on the complexities of selling real estate while managing a 72T distribution plan, emphasizing the need for regular withdrawals to avoid penalties. It also addresses the implications of withdrawing from a 401(k) on living expenses and net worth, alongside the challenges of healthcare costs in early retirement. The speakers share personal experiences and practical advice on utilizing the 72T strategy and navigating financial independence.

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Did you know you can use your 401(k) to retire early? Yep, it’s possible. And today’s guest, Eric Cooper, is doing it atage 47! Most FIRE chasers search for how to withdraw from a 401(k) early but know that doing so will hit them with substantial penalties. The best way around this? The 72(t) rule—which is precisely what Eric has been taking advantage of. Eric uses the 72(t) rule’s “substantially equal periodic payments” to take early withdrawals from his 401(k) of $30K per year, starting at age 47. But how does it work?

Eric comes on the show to describe exactly how this early withdrawal rule works, how much you can take out, the regulations to follow so you avoid penalties, and why early retirement may be much closer than you think. But this isn’t the only early retirement income Eric has got. We’ll review his substantial real estate portfolio and detail Eric's almostunbelievable tax savings from combining tax-advantaged rental properties with rule 72(t).

Plus, Eric shares how he built a multimillion-dollar nest egg by his mid-forties and why those starting young on the path to early retirement can repeat his strategy to be much richer in retirement. Do you have money sitting in retirement accounts that you’re ready to use? The 72(t) rule might be just what you need.

In This Episode We Cover

How to access retirement funds early with the often overlooked 72(t) rule

Escaping the “middle-class trap” that stops you from retiring on your terms

Avoiding 401(k) penalties and using retirement accounts to actually retire early

The rules and regulations you MUST follow to withdraw penalty-free

How Eric amassed such a massive retirement account balance (and how you can, too)

Early retirement healthcare and how to lower your taxable income to greatly reduce premium costs

And So Much More!

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