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Learning, Sharing, and Teaching => Investor Alley => Topic started by: oinkette on May 30, 2014, 08:35:26 AM

Title: Has Anyone Actually Done the SEPP 72(t) Distribution?
Post by: oinkette on May 30, 2014, 08:35:26 AM
NOTE: I asked this at ERE but didn't get a response so I'm also asking here.

I was reading this article by Dividend Mantra and it struck a chord. Basically he keeps 100% of his ER money in taxable accounts because he doesn't get a match from his employer (so no free money) and other reasons.

http://www.dividendmantra.com/2013/08/why-i-hold-100-of-my-equity-investments/ (http://www.dividendmantra.com/2013/08/why-i-hold-100-of-my-equity-investments/)


If all goes well I would like to be ER at 45. I also would like to avoid any hassle and am currently in a low (but not lowest) tax bracket. Based on what coworkers of mine had to deal with just to get their money out of our own 403b when they were actually at retirement age, I'm a bit worried.

Yes, I know the tax savings consequences, but if I have a hard time getting my money, what's the point?

But my REAL questions are:

Has anyone actually done the SEPP 72t, where you get your retirement income early via "substantially equal periodic payments"?

Was there any hassle dealing with the company holding the fund itself?

Did you get about what you expected in terms of payout?

Any other surprises?

Basically I'm trying to find out how much of a hassle it would be to actually get the money once I decide to retire 15-20 years earlier than expected.

Sorry if this has been asked and answered already. I searched and couldn't find it.
Title: Re: Has Anyone Actually Done the SEPP 72(t) Distribution?
Post by: Frankies Girl on May 30, 2014, 09:16:14 AM
I may not be much help, but I can tell you that there are several bloggers that do the Roth Pipeline and have been for some time. The SEPP/72t is a viable option instead of the Roth Pipeline, but because it involves a bit more consideration and exacting calculations otherwise a penalty might be assessed (from what I've read) it doesn't match the Roth Pipeline in terms of being the easiest way to get your money out in early retirement.

I do know that you can roll a 403b over to an IRA once you leave your employer, so that should allow you to also shift the account someplace like Vanguard that is skilled in distributions and won't give you crap trying to get your money out. I would think your former coworkers' experiences might be because they didn't know they could do this type of thing, and just left it where it was, in a 403b format, and the investment institution might just be jerks.
https://investor.vanguard.com/what-we-offer/401k-rollovers/401k-403b-to-ira-rollover-benefits


That being said, I'm sure there are some situations where a SEPP works better, and I do hope someone on here can answer your questions, so consider this a little bump as well...