New IRS rule offers higher penalty-free withdrawals for early retirees

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One of the pain points of early retirement is limited access to your nest egg before age 59½ without incurring a 10% penalty. While a new IRS rule makes it easier to tap more penalty-free money, you still need to weigh your options, financial experts say.

Generally, early pre-tax 401(k) or individual retirement account withdrawals trigger a 10% penalty on top of levies, with several exceptions, including so-called substantially equal periodic payments, or SEPPs, a series of distributions for five years or until age 59½, whichever is longer. These payments are also known as 72

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