Retirement Planning/Early retirement


Hi, I am looking at early retirement this fall, age 53, and have some questions about Substantially Equal Periodic Payments.  I have been with my current employer for 28 1/2 years and have a 401k with them.  What steps do I need to take to receive distributions from it without the 10% penalty, what forms do I need to use, are there annual steps I need to do, and how must the distributions be paid (do they have to be an annual payment or can they be monthly)?  Any other information you can provide will also be greatly appreciated.  Thank you for your time and consideration.

Sincerely,  Frank

Richard E. Reyes, CFP
Richard E. Reyes, CFP  
Frank sorry for the delay. I just got back into the office after a long weekend and found your question.

Congratulations on your early retirement. I would first take some time to review your situation with a Certified Financial Planner in your local area that works very closely with retirement distribution planning. You might be excited about the possibility of retiring at 53, however, it would be good to have a plan in place to see if this is even realistic. Longevity is the greatest of all risks for retirees and retiring at 53 makes the risk even more of an issue.

What you are considering is called a 72(t) distribution. It is easy to understand but complex to set up. I would only allow a qualified advisor who is well versed in the matter set it up for you. The biggest concern with setting one up is that you can easily run out of money before 59 1/2 or not follow the rules of distribution. Once this happens, the IRS will come looking for the 10% penalty from the day you started the plan.

Contact a Certified Financial Planner and review your options and allow him/her to assist you with the legwork.

Good luck. Happy Retirement.  

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Richard E. Reyes, CFP


I can provide answers to questions relating to retirement especially relating to; income distribution, tax efficiency, long-term care insurance, life insurance, estate planning, asset protection, variable and fixed annuities, alternative investments and prudent portfolio design.


Through the years Richard has built a reputation as one of Central Florida's expert on retirement income distribution by providing sound, unbiased wealth coaching. We believe that Financial Planning is the problem and Wealth Coaching is the solution. The Wealth Coaching process gives you Peace of Mind, so you can stop worrying about your future. It helps you find happiness as it guides you in the TRUTH of investing, by teaching you how to make wise choices as you journey through your life’s stages. It is all about your relationships and what you value, not your net worth.

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B.S. University of Florida, Gainesville, FL
CFP Certificate, University of Central Florida, Orlando, FL

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