Interest money

New IRS rule allows early retirees to take more money out of plans

The fixed annuity guarantees more income for early withdrawals without penalty from pension plans.

After the pandemic, more and more people want to tap into their retirement plans so they can retire early. Thanks to an IRS ruling that took effect in January 2022, they can now make larger early withdrawals without tax penalties.

This is how it works.

If you withdraw money from your IRA, 401(k), SEP IRA, or other qualified plans before age 59.5, you will normally be hit with a 10% tax penalty. However, the penalty disappears if you take “substantially equal periodic payments” (SEPP, also called the 72