Check the costs and commitments of early retirement withdrawals: test your skills
Withdrawals before 59½ usually add a 10% tax. Substantially equal periodic payments are one exception — with strict rules. Answer each question to see the explanation; your score appears at the end.
This test checks that you can
- Know the 59½ rule and 10% additional tax
- Describe the 72(t) SEPP exception
- Understand the modification penalty
- Practice
1. Early withdrawals before 59½ generally add…
- Practice
2. A SEPP must continue until…
- Practice
3. Modifying a SEPP early can…
- Key idea
4. Which statement best explains "Early access costs extra"?
- Key idea
5. Which statement best explains "SEPP is a long commitment"?
- Key idea
6. Which statement best explains "Breaking it is expensive"?
- Action plan
7. In the action plan, which step comes first?
- Mistake to avoid
8. Which of these is a mistake this lesson warns against?
- Mistake to avoid
9. Which of these is a mistake this lesson warns against?
You start a SEPP at age 57. Until what age must it continue?
Show the answer
62
57 + 5 = 62, which is later than 59½.
Write the age when penalty-free withdrawals generally begin and one alternative source of money before then.
More tests in this bootcamp
- Understand your 401(k) and employer match
- Open the idea of an IRA: account first, investments inside
- Compare Roth and Traditional IRAs through the tax timing
- Understand the backdoor Roth IRA and its tax pitfalls
- Understand an HSA’s tax benefits and receipt records
- Explore how claiming age changes Social Security benefits
- Use the 4% rule as a starting point, with its limits
- Plan for required minimum distributions
- Check the costs and commitments of early retirement withdrawals
- Final exam: Retirement accounts