Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



The Best Way for Early Retirees to Tap Their IRAs

Many people are successful in saving money for retirement through IRAs. But early retirees often need early access to their money. Avoiding penalties if you're not yet age 59 1/2 can be a challenge. 

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, goes through the substantially equal periodic payment exception to the 10% penalties for early IRA withdrawals. Dan notes that early retirees can use three methods for calculating those payments. One is based on the same rules that govern mandatory IRA withdrawals for those age 70 1/2 or older, while the others use more sophisticated calculations based on interest rates and annuity factors. Dan emphasizes that the key to the exception is that you have to keep taking payments until you reach age 59 1/2, regardless of whether you need them. For those who truly need early access to their IRAs, though, substantially equal periodic payments can be a good way to get it without paying unnecessary penalties.

Keep your money in your IRA
Your best choice is usually to keep your IRA money untouched as long as possible to maximize your tax-deferred returns. To do so, though, you need the best stocks you can find. The Motley Fool's free report "
3 Stocks That Will Help You Retire Rich" names stocks that could help you build long-term wealth and retire well, along with some winning wealth-building strategies that every investor should be aware of. Click here now to keep reading.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2680308, ~/Articles/ArticleHandler.aspx, 10/22/2016 11:27:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 day ago Sponsored by:
DOW 18,145.71 -16.64 -0.09%
S&P 500 2,141.16 -0.18 -0.01%
NASD 5,257.40 15.57 0.30%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes