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However, early retirees can still access their funds by taking what is known as substantially equal periodic payments (SEPP) in an IRA, 401(k), 403(b) or other qualified retirement account without ...
Substantially equal periodic payments (SEPP) are one of the exceptions in the United States Internal Revenue Code that allows a retiree to receive payments before age 59 1 ⁄ 2 from a retirement plan or deferred annuity without the 10% early distribution penalty under certain circumstances.
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Substantially Equal Periodic Payments. If you don’t qualify for a hardship exemption, you may be able to set up a series of substantially equal periodic payments, also known as SoSEPP. SoSEPP ...
Distributions in the form of an annuity (see substantially equal periodic payments) Distributions that are not more than the qualified higher education expenses of the owner or their children or grandchildren; Distributions to buy, build, or rebuild a first home ($10,000 lifetime maximum) Distribution due to an IRS levy of the plan
Exceptions exist to allow distribution of funds before 59½, such as "substantially equal periodic payments", disability, and separation from service after the age of 55, as outlined under IRS Code section 72(t).
Substantially equal periodic payments are one option available to those who really need to tap their IRAs early. But be aware that can be a complicated process, and could be easy to make a costly ...
The exceptions to the 10% penalty include: the employee's death, the employee's total and permanent disability, separation from service in or after the year the employee reached age 55, substantially equal periodic payments under section 72(t), a qualified domestic relations order, and for deductible medical expenses (exceeding the 7.5% floor).