1. Understanding the 72(t) Distribution Rules This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

2. 72(t) Distribution Rules In an earlier training, we discussed some of the exemptions to the 10% penalty incurred due to early withdrawals (prior to age 59.5)… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

3. 72(t) Distribution Rules One of these exemptions was a “substantially equal periodic payment” plan, known as a 72(t) distribution… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

4. 72(t) Distribution Rules A 72(t) distribution allows you to avoid the 10% penalty by taking a series of (at least) annual distributions from your retirement account. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

5. 72(t) Distribution Rules Please note, however, that this distribution will still be taxed as ordinary income. In other words, you are only avoiding the 10% penalty, not the ordinary income taxes. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

6. 72(t) Distribution Rules These distributions must be “substantially equal periodic payments” so as to distribute the entire balance of your account over your remaining life expectancy (or the joint life expectancy of yourself and your designated beneficiary). This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

7. 72(t) Distribution Rules After you’ve begun taking your 72(t) distributions, you must continue taking them for 5 years or until you reach age 59½, whichever comes later. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

8. 72(t) Distribution Rules For example, if you start taking your payments at the age of 52, then you must do so for 8 years. Someone who starts at 57, must do so till the age of 62. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

9. 72(t) Distribution Rules That means that once you’ve begun the payments, you’re locked in for several years. No changing your mind unless you want to deal with penalties and interest. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

10. 72(t) Distribution Rules There are three methods for calculating the distributions, which is beyond the scope of this training. We suggest you have your tax advisor help you with these calculations if you choose to utilize this strategy. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

11. 72(t) Distribution Rules Once you’ve been taking the payments for 5 years and you’ve reached age 59½, you can discontinue the payments (should you want to). This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

12. 72(t) Distribution Rules As with many strategies, the 72(t) distribution can be a great tool, but make sure you follow the rules to avoid any potential pitfalls… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

13. 72(t) Distribution Rules You should take into consideration the possibility of depleting your retirement account well before the end of their life expectancy. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

14. 72(t) Distribution Rules And if you do not follow the plan or you subsequently modify the payment amounts, the 10% additional tax applies retroactively to the entire period you were receiving the payments. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

15. 72(t) Distribution Rules The 72(t) distribution rules are quite complex, and obviously we can’t cover all the nuances here in this brief training… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

16. 72(t) Distribution Rules Just work with your tax advisor to make sure you are following the rules, taking your distributions on time, filling out the correct IRS forms, choosing your ideal calculation method… This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com

17. 72(t) Distribution Rules …and most of all, that you are making the right decisions for your specific circumstances. This material is copyright © 2013 by SSEN LLC and is used under license by Strategic Affluence LLC. This presentation is not to be construed as legal or professional advice and is subject to terms and conditions posted at http://www.StrategicAffluence.com