Also called: 59 1/2 rule, Rule of 55, 72(t), SEPP
Taxable withdrawals from IRAs and employer plans before age 59 1/2 generally carry an extra 10% tax. Exceptions include leaving an employer at 55 or later and substantially equal periodic payments.
The separation-from-service exception applies only to the plan of the employer you left in or after the year you turned 55 (50 for qualified public safety employees). It does not apply to IRAs, so rolling that plan into an IRA forfeits it.
Substantially equal periodic payments (SEPP) must continue for five years or until 59 1/2, whichever is later.
RetIQ models a SEPP series (the SEPP / §72(t) card on the Accounts tab): choose the RMD, amortization, or annuitization method — or enter a manual amount — and a start age. The payments come out of your pre-tax pool penalty-free until the later of five years or 59 1/2; a voluntary withdrawal beyond the series stays penalized.