Since the age 55 exception will not be available from the current plan, and if the person is not going to seek new employment, the 72t plan will likely be needed. However, 500k will only generate annual distributions in the 23k area, less than 1/3 of what is needed. What’s worse, if the IRA rollover is partitioned into two accounts, one to support the 72t, then the 72t IRA will only be 1/3 the total IRA balance and will then only generate 7.5k per year penalty free. Perhaps the person should seek new employment that offers a 401k that will accept a rollover of the 500k. If he then works long enough to get him to the year in which he turn 55, the entire balance will be eligible for the age 55 penalty exception and the 72t can be avoided. Another option is a position that generates enough income of perhaps 50k, which added to a 72t will generate the 72k needed. And of course, try to reduce the needed 72t amount in the first place.

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