FIXED AMORTIZATION METHOD
One of three methods by which early retirees of any age can access their retirement funds without penalty before turning 50.5. The fixed amortization method amortizes the retiree's account balance over his/her remaining life expectancy as estimated by IRS tables at an interest rate that is not more than 120% of the federal midterm rate. Once the withdrawal amount is calculated, it cannot be changed.
The two other methods for early, penalty-free retirement withdrawals are the fixed annuitization method and the required minimum distribution method. Each method can result in quite different distribution amounts. The fixed amortization method can produce higher payments than the required minimum distribution method, but involves complex calculations and runs the risk of not keeping up with inflation.
POPULAR TERMS
Equalization Payments
Seller
SLL
Error Term
Treasury Bill - T-Bill
POPULAR ARTICLE
SEE FOREX TUTORIAL
Buying a Home: Finding the Best House
Buying a Home: Everybody’s Goal
Ethical Investing: Instruments for Ethical Investing
An Introduction to Insurance
A Primer on Retirement Planning
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