Is 72t a Solution to a “Need” or a “Want”

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72t Investment Solution

Over 30+ years in business, we have helped many families get financially organized and make better investment decisions with their money. We have counseled individuals and families about how to save money and accumulate wealth. We’ve been a big believer and teacher of wealth building and believe the only way to do this for most people is to systematically save money each month as an automatic deduction from their checking account and transferred to a separate savings, 72t investment account. This “pay yourself first” mentality has been why most our clients have accumulated substantial wealth over time.

This “pay yourself first” system is the exact reason so many people have accumulated significant wealth in their 401(k) and/or other retirement account (the equity in your home is a similar analogy since making monthly payments over 15 or 30 years plus appreciation also accumulates significant wealth). Contributing for many years to your 401(k) has allowed many people to accumulate what is the largest liquid some of money they will have in their e. am also a big believer in dollar cost averaging. Adding money every (2) weeks or every month to your entire 401(k) allows you to buy more shares when the price of shares is lower and less shares when the prices are high. This is dollar cost averaging.

Many of our clients are under the age of 59 ½ and were looking to access their IRA/401(k)/TSP/TSAV Pension/Retirement Funds without being assessed the 10% early distribution penalty? If this is something you want or need to do, by taking substantially equal periodic payments (SEPP) or 72(t) payments you can take early distributions from your IRA and avoid the penalty.

Keep in mind that there are many rules and considerations that must be taken into account.

Remember, it takes no skill to spend money; the hard part is to make it and save it. I have always believed that “you get what you pay for.”

In my life, I’ve always believed “it pays to get advice”. Once of my favorite sayings is, “Common see people who have made common sense investment sense is not that common”. Every day in my practice mistakes that have cost them thousands or tens of thousands of dollars that could have been avoided by getting proper advice and counsel from a competent financial professional. Often, people make financial decisions and then ask, “Did I make the right decision?”  We hope people will consult with us before they make a 72(t) early retirement decision because the costs and penalties for mistakes are significant.

I agree that there are some areas of personal finance that you can do yourself without the help of an advisor. For example, setting up a checking or savings account at a local bank or credit union. when it comes to investment planning, asset management, income planning, life and disability insurance, required minimum distribution strategies as well as hiring a 72t professional is a smart decision. Calling one of the (800) numbers at a well-known investment company and asking them to help you with 72(t) planning is a problem waiting to happen. Why? These companies are not in the advice business. They really don’t want to advise on a 72t strategy; they simply want you to invest money at their company.

Because we are affiliated with an independent broker-dealer, we do not have any proprietary products to push or sell.  We are truly an independent advisory firm and have many solution (“risk based” and “safe money options”) that we can offer to help our clients and prospects accomplish their stated goals and objectives.

Stuart J. Spivak

LUTCF, RFC is senior Partner at The Spivak Financial Group