Early withdrawal from IRA 72 (t)?
I am 29, and need emergency money. I have a rollover ira and would like to take a withdrawal.
I found form 72 (t) on the companys website I have my ira with, is this something I can do?
And can I just get a lump sum withdrawal? The form mentions distributions in payment or a fixed amount.
I understand the 10% penalty, but before I send the form in, is this Im even elligible for?
Thanks in advance!
Permalink Submitted by Alan Spross on Thu, 2007-11-15 00:00
You are eligible, but a 72t is completely impractical for someone your age. Once you start a 72t, the distributions must be taken for 5 years or to age 59.5, whichever is longer. I have never heard of a 72t spanning anywhere near 30 years. Even for someone in their late 40s, the inflexibility of the plan invariably causes problems.
Just take your distribution, and pay the penalty if you have no other potential sources of funds, such as a loan. There are also some other exemptions from the penalty that could apply if you have those types of expenses in the year you take the distribution. The exceptions are listed on p 52 of Pub 590.