2 Ways to Avoid the 10% Early Withdrawal Penalty

72t

72t is the IRS code that allows you to avoid the 10% early withdrawal penalty when taking money from a retirement account if you are less than 59 1/2. You must take payments for 5 years or reaching 59 1/2, whichever is longer.
72t is most beneficial to people who are 54, 55 or 56.
The IRS established a new minimum interest rate which allows you to take out 6.2%. This is significantly higher that rates a few years ago & at the top end of the amount you should take from a retirement account in your mid-50s.
For those of you 54-56 considering retiring this is a blessing.
The next is specific to your 401K & grouped into IRS topic No. 558’s exceptions.

IRS Topic No. 558 allows...

A one-time penalty free distribution from your 401K
if you are under 59 1/2,
separated from your employer
& turning 55 that year or older.