Be Careful: IRA Withdrawals Can Put Early Retirees Over a Barrel
USA Today (08/27/02) p.H5; Block, Sandra

Early retirement seemed like a good idea to workers during the bull market, but the drop in the stock market has left many of them with much smaller IRAs, and they are getting pinched by the "substantially equal periodic payments rule," according to this opinion piece. This rule lets people avoid the 10 percent early withdrawal penalty for IRAs by taking out a predetermined amount each year, with the most popular being the amortization method, but the payment stays the same even if the IRA shrinks. Those forced into early retirement with few other savings should start taking payments as late as possible, avoid overestimating returns, and split their IRAs, the commentary says.


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