Do you want your retirement income before 59 ½?
Many nurses have build up great retirement accounts through their employer or through an IRA and sometimes there could be a need or desire to get access to the money inside of these accounts pre age 59 ½.
The general thinking is that you always have to wait until age 59 ½ to avoid additional tax penalties and normally if you take distributions from these accounts before age 59 ½ you will be hit with a 10% penalty on top of the regular taxes.
But there is an option that could be beneficial in limited specific situations.
Nurses that are IRA owners can elect to receive what is called 72(t) distributions which will help them avoid the 10% premature penalty tax on the distributions that are taken before age 59 1/2.
The 72(t) payments are calculated from methods that have been approved by the Internal Revenue Service (IRS) and it is important to understand that this type of distribution does not avoid any other taxes but only gives an exception to the premature penalty distribution.
Once the calculation of distribution amount has been determined, the distributions has to be taken at least annually for the greater of five years or until the IRA owner attains age 59 1/2.
A very thorough analysis of any tax consequences, income scenarios and a full analysis of the overall financial picture of an individual should be done before considering such a method and all pros and cons should be considered