Anyone using SOSEPP in early retirement?

[SachaFiscal]

Is anyone using the Series Of Substantial Equal Periodic Payments from Internal Revenue Code §72(t)(2)(A)(iv) to fund early retirement?  If so how many years have/will you be doing it for?  Which method are you using to determine your periodic payment (required minimum distribution, fixed amortization, or fixed annuitization)?  Has anyone had any issues with making mistakes on the periodic payments and having to pay the 10% penalty?

[SachaFiscal]

Although only a few people have voted so far, I'm getting the impression that SOSEPP is not a great method for getting at your 401k n early retirement. Probably others are using a ROTH ladder instead.

[jim555]

It is very strict and can't be changed once it is started.  That is one reason why I am avoiding it.

[SachaFiscal]

Yes, re seems to be a lot of very specific complicated rules. And severe repercussions if you don't follow them exactly.  Are you doing a Roth ladder? Maybe it should be another topic, but it would be nice to hear from some folks who are actually doing the Roth ladder and are at the stage where they are both doing conversions and utilizing a conversion from 5 years ago for their retirement expenses. I hear about a lot of people planning to do it but not people who are actually doing it.

[PeteD01]

There is one more way to do SEPP and that is to actually annuitize and that is what we did at ages 54 and 52. Even variable annuities are considered 72(t) compliant although the payout varies.
We annuitized 96% of our liquid assets with the following allocation: 40% global equities, 25% TIAA Real Estate Account, and 35% TIAA Traditional.

I like the monthly paychecks and can just keep living as I did before FIRE.

[Mr. Green]

As a couple retiring in our 30's, I didn't want to be locked into a specific income stream. If we ever took jobs in the future we would not be able to control total income in a year, which could have undesired tax consequences. We have more than enough money in taxable accounts to support ourselves for at least 5 years, probably a good bit longer. We'll start the Roth pipeline as soon as we're both not working but we probably won't need to withdraw any money from it immediately (5 years later).