货币英语 12 Avoid Early Withdrawal Penalties

By Laura Adams

In this episode I’ll discuss a legal way to make early withdrawals² from your retirement³ account without having to pay an early withdrawal¹ penalty.
Can You Avoid Early Withdrawal Penalties on Retirement Accounts?
When it comes to saving for retirement, you can’t beat government-sponsored retirement accounts. If you’re a regular Money Girl listener, you already know about the great tax advantages you receive for keeping your money in a retirement account until you’re 59½ years old. But what happens if you need to get your money out of a retirement account before you retire?
Early withdrawals are usually not a good idea because there’s a steep 10% penalty to pay, except in certain qualified⁴ situations such as distributions for first-time home buyers, education expenses, and medical hardships. However, there’s a little-known legal loop hole that you can use to avoid the early withdrawal penalty. Before you consider this option, realize that it comes with restrictions⁶ and risky⁷ consequences.What Are 72(t) Payments?
The loop hole for early withdrawals that I’m talking about is called a 72(t) payment plan. The name comes from its numbered section of the IRS tax code. 72(t)s are also known as substantially equal periodic payments, and they can generally be used with retirement accounts such as IRAs, 401(k)s and 403(b)s.
Here’s how 72(t) payments work: You can set up a plan to take equal monthly or annual distributions out of your retirement account. The amount of money you can take out is calculated using an accounting⁸ method that’s approved by the IRS. The payment amount depends on various factors such as your retirement account balance, age, life expectancy⁹, as well as the age and life expectancy of your account beneficiary. I’ll put a link to a 72(t) calculator in the show notes at the bottom of the page that shows how much you could receive in distributions based on your situation.
Once you begin taking 72(t) distributions from a retirement account, you must continue taking them for a minimum of five years or until you turn 59½, whichever is longer. During that time you generally can’t modify the payment amount or suspend the payments. After you’ve completed a series of 72(t) payments, and reach the age of 59½, you can take retirement distributions out of your account as you see fit. However, for most traditional retirement plans, once you reach age 70½, you generally must take required minimum distributions annually¹⁰ from your retirement account, whether you used a 72(t) plan or not.
Another restriction⁵ of having a 72(t) plan is that you can’t make additional contributions to the retirement account while you’re receiving periodic payments. A violation¹¹ of the rules results in a 10% penalty, plus interest, on all funds withdrawn¹² prior to age 59½.
Why Set Up a 72(t) Plan?
In these challenging economic times, an increasing number of retirement account owners have been using 72(t) payment plans to tap their money without incurring¹³ an early withdrawal penalty. If you’re facing a devastating¹⁴ financial hardship or bankruptcy¹⁵, draining your retirement funds prematurely¹⁶ may be your last resort to pay for day-to-day living expenses.
Or, if you’re fortunate enough to retire early, you can use a 72(t) plan to starting spending your retirement stash¹⁷. If you’re certain that you have enough retirement money to last as long as you’ll need it, you can use 72(t) distributions to pay down or eliminate debt, pay for college tuition for family members, or to supplement your current income.
72(t) Payment Plan Examples
Here’s an example: Let’s say Alex has accumulated a large nest egg well ahead of his retirement saving schedule. He decides to retire early and sets up a 72(t) plan for his IRA when he’s 50 years old. The rule is that he must continue taking substantially equal periodic payments for five years or until he’s 59½, whichever is longer. Since he’s 50, he can’t stop taking the 72(t) distributions for 9½ years, until his 59½ birthday.
Here’s another example: Sue gets downsized from her job and is offered an early retirement settlement from her company at age 58. She rolls over her 403(b) into an IRA and sets up a 72(t) plan. Even though she only has a year and a half until she reaches the official retirement age of 59½, she has to continue taking the 72(t) payments for five years, until she’s 63. At that time she can continue taking the same distribution payment or modify it to any amount that she wants.
Important Points About 72(t) Payments
An important point to remember is that 72(t) payments are subject to regular income tax (unless they were already taxed, as would be the case for contributions made to a Roth account). When a 72(t) plan is executed properly, it can be a smart way to access your retirement funds early. But when it’s set up incorrectly--with a botched payout schedule, for instance--it could result in expensive consequences. Therefore it’s important to set up a 72(t) payment plan only if it’s absolutely necessary. Never enter into a 72(t) plan lightly or count on it to bail¹⁸ you out of a financial mess.
The IRS rules and payment calculations for these plans are complicated, even for professionals. So if you’re interested in setting up a 72(t), be sure to consult with a competent financial advisor¹⁹ or accountant who has specialized²⁰ experience handling them.
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I’m glad you’re listening. Chi-Ching, that's all for now, courtesy of Money Girl, your guide to a richer life.

 

1 withdrawal   

n.取回，提款；撤退，撤军；收回，撤销

参考例句：

• The police were forced to make a tactical withdrawal.警方被迫进行战术撤退。
• They insisted upon a withdrawal of the statement and a public apology.他们坚持要收回那些话并公开道歉。

2 withdrawals   

n.收回，取回，撤回( withdrawal的名词复数 )；撤退，撤走；收回[取回，撤回，撤退，撤走]的实例；推出（组织），提走（存款），戒除毒瘾，对说过的话收回，孤僻

参考例句：

• He has made several withdrawals from his bank account. 他从银行账户上提了几次款。 来自《简明英汉词典》
• It is not the bank's policy to deduct interest on withdrawals. 提款需扣除利息这并非是本银行的政策。 来自辞典例句

3 retirement   

n.退休，退职

参考例句：

• She wanted to enjoy her retirement without being beset by financial worries.她想享受退休生活而不必为金钱担忧。
• I have to put everything away for my retirement.我必须把一切都积蓄起来以便退休后用。

4 qualified   

adj.合格的，有资格的，胜任的，有限制的

参考例句：

• He is qualified as a complete man of letters.他有资格当真正的文学家。
• We must note that we still lack qualified specialists.我们必须看到我们还缺乏有资质的专家。

5 restriction   

n.限制，约束

参考例句：

• The park is open to the public without restriction.这个公园对公众开放，没有任何限制。
• The 30 mph speed restriction applies in all built-up areas.每小时限速30英里适用于所有建筑物聚集区。

6 restrictions   

约束( restriction的名词复数 )； 管制； 制约因素； 带限制性的条件（或规则）

参考例句：

• I found the restrictions irksome. 我对那些限制感到很烦。
• a snaggle of restrictions 杂乱无章的种种限制

7 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

8 accounting   

n.会计，会计学，借贷对照表

参考例句：

• A job fell vacant in the accounting department.财会部出现了一个空缺。
• There's an accounting error in this entry.这笔账目里有差错。

9 expectancy   

n.期望，预期，（根据概率统计求得）预期数额

参考例句：

• Japanese people have a very high life expectancy.日本人的平均寿命非常长。
• The atomosphere of tense expectancy sobered everyone.这种期望的紧张气氛使每个人变得严肃起来。

10 annually   

adv.一年一次，每年

参考例句：

• Many migratory birds visit this lake annually.许多候鸟每年到这个湖上作短期逗留。
• They celebrate their wedding anniversary annually.他们每年庆祝一番结婚纪念日。

11 violation   

n.违反(行为)，违背(行为)，侵犯

参考例句：

• He roared that was a violation of the rules.他大声说，那是违反规则的。
• He was fined 200 dollars for violation of traffic regulation.他因违反交通规则被罚款200美元。

12 withdrawn   

vt.收回；使退出；vi.撤退，退出

参考例句：

• Our force has been withdrawn from the danger area.我们的军队已从危险地区撤出。
• All foreign troops should be withdrawn to their own countries.一切外国军队都应撤回本国去。

13 incurring   

遭受，招致，引起( incur的现在分词 )

参考例句：

• Many of the world's farmers are also incurring economic deficits. 世界上许多农民还在遭受经济上的亏损。
• He spoke to the Don directly, taking a chance on incurring Michael's ill will. 他直接向老头子谈自己的意见，这显然要冒引起迈克尔反感的风险。 来自教父部分

14 devastating   

adj.毁灭性的，令人震惊的，强有力的

参考例句：

• It is the most devastating storm in 20 years.这是20年来破坏性最大的风暴。
• Affairs do have a devastating effect on marriages.婚外情确实会对婚姻造成毁灭性的影响。

15 bankruptcy   

n.破产；无偿付能力

参考例句：

• You will have to pull in if you want to escape bankruptcy.如果你想避免破产，就必须节省开支。
• His firm is just on thin ice of bankruptcy.他的商号正面临破产的危险。

16 prematurely   

adv.过早地，贸然地

参考例句：

• She was born prematurely with poorly developed lungs. 她早产，肺部未发育健全。 来自《简明英汉词典》
• His hair was prematurely white, but his busy eyebrows were still jet-black. 他的头发已经白了，不过两道浓眉还是乌黑乌黑的。 来自辞典例句

17 stash   

v.藏或贮存于一秘密处所；n.隐藏处

参考例句：

• Stash away both what you lost and gained,for life continues on.将得失深藏心底吧，为了那未来的生活。
• That's supposed to be in our private stash.这是我的私人珍藏。

18 bail   

v.舀（水），保释；n.保证金，保释，保释人

参考例句：

• One of the prisoner's friends offered to bail him out.犯人的一个朋友答应保释他出来。
• She has been granted conditional bail.她被准予有条件保释。

19 advisor   

n.顾问，指导老师，劝告者

参考例句：

• They employed me as an advisor.他们聘请我当顾问。
• The professor is engaged as a technical advisor.这位教授被聘请为技术顾问。

20 specialized   

adj.专门的，专业化的

参考例句：

• There are many specialized agencies in the United Nations.联合国有许多专门机构。
• These tools are very specialized.这些是专用工具。