But what if you want to retire before age 59 1/2? How can you get to your money without that pesky 10% penalty that comes with taking money out before age 59 1/2?
Your taxable account is your least tax-efficient way to invest. Yes, it has its tax benefits, but these pale in comparison to IRAs and 401Ks, especially when you consider the additional estate planning.
A 457(b) is a tax-protected account available to many docs who work for university hospitals. If you have a 403B you ought to look and see if you have a 457 too.
The Substantially Equal Periodic Payments (SEPP) rule is the little-known exception to get into your IRA as soon as you retire. You basically “annuitize” your IRA from the time you retire until 59 1/2.
Per IRS Publication 590, you can take out the money without paying the 10% penalty for the following reasons: – Unreimbursed medical expenses > 7.5% of your adjusted gross income