{"id":9933,"date":"2025-05-04T07:00:00","date_gmt":"2025-05-04T07:00:00","guid":{"rendered":"https:\/\/riverbend.objectivebrand.com\/?p=9933"},"modified":"2025-05-02T15:53:09","modified_gmt":"2025-05-02T15:53:09","slug":"6-ways-to-access-retirement-accounts","status":"publish","type":"post","link":"https:\/\/riverbend.objectivebrand.com\/?p=9933","title":{"rendered":"6 Ways to Access Retirement Accounts Before 59.5-Finger Financial Five # 211"},"content":{"rendered":"\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t
\n\t\t\t

\n\t\t\t\t\n\u201cAn ounce of prevention is worth a pound of cure.\u201d\n\n\t\t\t<\/p>\n\t\t\t\t\t\t\t

\n\t\t\t\t\t\t\t\t\t\t\t-Benjamin Franklin<\/cite>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/path><\/svg>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\tTweet<\/span>\n\t\t\t\t\t\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/blockquote>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t\t
\n\t\t\t
\n\t\t\t\t\t\t
\n\t\t\t\t
\n\t\t\t\t\t\t\t\t\t

Jeff Bezos talks about decisions as either one-way doors or two-way doors. One way means that you can’t back out. Two-way doors, you can.<\/span><\/p>

I also like the way Tim Ferris talks about decisions. They are either hats, haircuts, or tattoos. You can change a hat easily. Haircuts take some time. Tattoos are practically permanent, and very painful to change.\u00a0<\/span><\/p>

Today, we are going to review six ways you can access your retirement accounts before age 59.5.\u00a0<\/span><\/p>

First is with a <\/span>10% penalty on IRA accounts<\/b>. So you want to try to avoid this one. This is an expensive <\/span>haircut.\u00a0<\/span><\/i><\/p>

Second, <\/span>Roth contributions. <\/b>You can take out your Roth contributions <\/span>tax-free and penalty-free. <\/span>If you contributed $7,000 to a ROTH IRA each year for 10 years, you now have $70,000 you can pull from. You will need to leave your earnings in that account. I am still going to say this is a haircut because this is very valuable money. It can grow TAX-FREE for as long as you keep it in that account.\u00a0<\/span><\/p>

Third, <\/span>Roth Conversions<\/b>. You can transfer money from a traditional IRA to a Roth IRA through a Roth Conversion. This is a powerful tax planning strategy. You can take your conversion amount out without penalty or taxes if you did that conversion over 5 years ago. This will satisfy the 5-year rule. If you don\u2019t have a Roth IRA, you may want to start one, even if it is small. This will start the <\/span>5-year clock<\/span><\/a>.\u00a0<\/span><\/p>

This is a haircut. Roth money should be left to compound.\u00a0<\/span><\/p>

Fourth, <\/span>72-t distributions<\/b>. This rule allows you to take penalty-free withdrawals as long as they are \u201csubstantially equal periodic payments.\u201d You MUST take them for 5 years OR to age 59.5, whichever is longer. This is a tattoo. You can’t reverse this decision.\u00a0<\/span><\/p>

Fifth,<\/span> The <\/span>Rule of 55<\/b><\/a>.<\/b> If you leave your job in or after the year you turn 55 (or 50 for public safety workers), you can withdraw funds from your current employer\u2019s retirement plan without the usual 10% early withdrawal penalty. You\u2019ll still owe income tax as usual, but that extra penalty disappears.<\/span><\/p>

However, there are a few important caveats:<\/span><\/p>