The IRS Rule That Could Save Your Early Retirement (No, Seriously)

Burned out? Laid off? Can’t sit through one more “All Hands” meeting where Todd from Accounting performs a spoken word about synergy? Honey, maybe it’s time to retire early—even if you didn’t plan to.

This week on Queer Money®, we’re spilling the retirement tea 🍵 on a not-so-boring IRS rule with a Star Wars-sounding name: Rule 72(t). This little-known financial lifeline lets you tap your IRA or 401(k) penalty-free before 59½ if you're done-done (emotionally or professionally). Yes, the IRS will Cher slap you with a 10% penalty otherwise—but not with this rule, darling.

We break down the 3 payment options with sass and strategy—from cautious queens to high-rolling honeys—and share how this rule might just be your early retirement Plan B.

If you’re dreaming of sipping espresso in Porto instead of grinding at your desk, listen up. Rule 72(t) could be your official exit plan.

Takeaways:

• What is IRS Rule 72(t)? A legit way to take early retirement withdrawals without the IRS penalty. Yes, it’s real. No, it’s not a droid.
• Three Queen-Approved Payment Plans:
• Required Minimum Distribution – For the cautious queens who want to test the waters.
• Fixed Amortization – For the dependable divas who love predictability.
• Fixed Annuitization – For high-rolling honeys who want more moolah now (but no take-backs, babes).
• You still pay taxes (because this isn’t RuPaul’s Tax-Free Fantasy Camp), but no 10% early withdrawal penalty is a big win.
• This rule works best if you’re 50–59½, have a chunk in retirement accounts, and truly need the income.
• WARNING: If you break the rule (even by $1), the IRS will come for you harder than a drag queen chasing a $20 tip. 💅
• Not for everyone – definitely consult your financial advisor or accountant (and maybe educate them in the process 👀).
• Feeling lemon-y about layoffs and burnout? This may be your early retirement lemonata.

Chapters:

• 0:00 - Intro
• 0:43 - The T on Rule 72t
• 2:08 - How Rule 72t works
• 2:30 - The 3 Withdrawl Methods
• 4:52 - Requirements to avoid the 10% penalty
• 5:45 - Who this rule works best for
• 7:29 - Wrap up

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