The Ultimate Guide to the 72(t) Rule to Retire Early (2025) | Bigger Pockets Video

Episode #649
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On this episode of the BiggerPockets Money Podcast, hosts Mindy Jensen and Scott Trench welcome John Bowens from Equity Trust to reveal a retirement strategy that 99% of people don't know exists. If you've ever wondered how to access your 401k or IRA before age 59½ without getting slammed with that brutal 10% penalty, this episode is for you. John is going to walk you through the 72t rule - a perfectly legal IRS provision that allows early retirees to create their own pension-style payments from their retirement accounts.

We're diving deep into Substantially Equal Periodic Payments, or SEPP, breaking down the three different calculation methods you can use, the critical mistakes that could cost you thousands in penalties, and the investment strategies that separate successful early retirees from those who run out of money. Whether you're planning to retire in your 40s or 50s, or you just want to understand all your options for financial independence, John's expertise could literally save you tens of thousands of dollars in penalties and taxes. Let's jump in!

00:00 Introduction to the 72(t) Rule
03:51 Substantially Equal Periodic Payments Explained
10:58 Distribution Methods: RMD, Amortization, and Annuitization
21:51 Investment Strategies for 72(t) IRAs
28:08 Liquidity and Investment Choices in 72(t) IRAs
33:33 Understanding Early Retirement Strategies
39:09 Exploring Roth IRAs and SEPP Distributions
44:03 Tax Strategies for Real Estate Investors
51:14 The Importance of Roth Conversions
57:01 Transitioning Out of SEPP Distributions
01:01:08 Equity Trust and Self-Directed IRAs