rule 72(t)


A rule that allows an individual to withdraw funds from an IRA before age fifty-nine and a half without paying a penalty. Under this rule, funds must be withdrawn in equal amounts at regular intervals. The withdrawals must continue for a period of five years or until an individual reaches age fifty-nine and a half, whichever comes later.

Use rule 72(t) in a sentence

You should always make sure that you follow rule 72 and do not do anything that may break it at all.

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The rule 72 was in place and it was there to allow individuals to withdraw funds from an IRA, which was a good idea.

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After the recession of 2008, my friend's Dad used rule 72 to make early withdrawals from his IRA without penalty, which helped in the short term but because he is still not 59 and a half, caused him to deplete his retirement account early meaning he will have to work for longer than anticipated.

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