In partnership with

The weekly email that keeps you up to date on exciting Retirement topics in an enjoyable, entertaining way for free.

Retirement Engineered: How 72(t) and Indexed Annuities Can Fund a Lifetime Income Strategy Using IUL

by Eric Seyboldt, MBA

For those who’ve built strong retirement accounts but aren’t quite 59½, the IRS has a warning: “Touch it now, and we’ll take 10% off the top.” But what if that money could be used strategically—not just to bridge the income gap, but to build another tax-advantaged asset for the future?

That’s where smart planning comes in.

By combining IRS Code 72(t) with a Fixed Indexed Annuity inside an IRA, and funneling the penalty-free distributions into a properly structured Indexed Universal Life (IUL) policy, savvy retirees can create a long-term asset that grows tax-deferred, offers future tax-free income, and locks in permanent life insurance benefits for their families.

This isn’t some tax loophole. It’s a calculated strategy. And in the hands of the right advisor, it can change the entire shape of a retirement plan.

The 72(t) Framework, with a New Twist

Section 72(t) of the Internal Revenue Code allows penalty-free withdrawals from qualified retirement accounts before age 59½—so long as the withdrawals follow a structured schedule of Substantially Equal Periodic Payments (SEPPs). Once you begin, the payments must last for five years or until age 59½, whichever is longer.

But instead of spending those withdrawals, what if they’re repositioned into a long-term, tax-advantaged vehicle?

That’s exactly what happens when those SEPP distributions from a Fixed Indexed Annuity IRA are directed into a new IUL policy—an insurance contract built for both long-term cash value accumulation and permanent death benefit coverage.

Real-World Example: From Annuity to IUL, by Design

Meet Lisa, age 53. After selling her business and rolling her proceeds into an IRA, she wants to semi-retire—but doesn’t want to get punished with a 10% early distribution penalty. Her advisor proposes a plan:

• Transfer $500,000 into a Fixed Indexed Annuity inside the IRA.

• Initiate 72(t) withdrawals—about $24,000 per year—for the next 6½ years.

• Redirect those distributions (net of taxes) into a newly issued IUL that’s designed for maximum cash value, not death benefit.

By doing this, Lisa now has a permanent life insurance policy that’s quietly building cash value, which she can later borrow against tax-free to supplement income in her 70s and 80s. Meanwhile, her annuity principal continues earning interest based on market index performance—without any risk of loss due to market downturns.

Why This Strategy Works

This isn't about selling insurance. It’s about tax positioning and retirement timing.

1. Penalty-Free Early Income: The 72(t) rule allows early withdrawals with no 10% penalty.

2. Annuity Growth and Simplicity: The indexed annuity simplifies the SEPP payments and continues to grow with zero market downside risk.

3. IUL Tax Leverage: The IUL acts like a second retirement account, but with no IRS contribution limits, no RMDs, and tax-free access to cash via policy loans.

The annuity provides structure. The IUL provides flexibility. Together, they create a bridge and a back-end income solution with legacy benefits built in.

Designed for Maximum Efficiency

The IUL in this strategy isn’t your grandpa’s insurance policy. It’s engineered with the smallest allowable death benefit and the maximum allowable premium under IRS guidelines—using the GPT or CVAT tests—to make it lean, fast-growing, and compliant.

By layering SEPP-funded premium payments into the IUL over 5–7 years, the policy builds substantial cash value early. Then, down the road—maybe in Lisa’s early 70s—it becomes a tax-free income engine. And should she pass unexpectedly, it becomes a tax-free death benefit to her family.

Key Considerations and Cautions

• The SEPP Rules Are Rigid. Miss a payment or change the amount early, and the IRS can retroactively apply the 10% penalty—with interest.

• You Must Use the Right Annuity. Not all indexed annuities support flexible withdrawal schedules. Choose a carrier familiar with SEPP strategies.

• IUL Design Matters. The IUL must be structured for accumulation, not commission. That means working with an advisor who knows how to build low-cost, high-efficiency policies.

• Coordination Is Key. This strategy demands tight coordination between the annuity withdrawal schedule, IUL premium schedule, and annual tax planning.

This isn’t a “set it and forget it” idea—it’s a strategy for people who want to make their money work smarter in every phase of retirement.

Turning a Penalty Problem Into a Lifetime Advantage

Most people think about early withdrawals as a tax problem. But in the hands of the right planner, they become a wealth-building opportunity.

By combining the discipline of a 72(t) income stream, the safety and predictability of a Fixed Indexed Annuity, and the long-term tax efficiency of an IUL… a retiree can fund two retirement chapters with one coordinated strategy:

• Income today, or the future with no penalty.

• Tax-free access and insurance protection tomorrow.

If you’re not 59½ yet but ready to take control of your retirement, there’s a smarter way forward. Let’s build a strategy that works now and decades from now—because retirement isn't an age. It’s a plan.

Take the Next Step Toward a Smarter Retirement Strategy
If you're approaching retirement before age 59½—or simply want to explore more strategic ways to access and grow your wealth—now is the time to consider a coordinated plan using tools like Indexed Annuities and Indexed Universal Life Insurance.

Reach out for a complimentary 10-minute consultation by calling 614‑943‑2265. We’ll walk you through how IRS Rule 72(t) can provide penalty-free income today, while funding tax-advantaged assets for tomorrow.

Because your retirement plan shouldn't stop at income. It should build legacy, flexibility, and tax efficiency—on your terms.

Keep This Stock Ticker on Your Watchlist

They’re a private company, but Pacaso just reserved the Nasdaq ticker “$PCSO.”

No surprise the same firms that backed Uber, eBay, and Venmo already invested in Pacaso. What is unique is Pacaso is giving the same opportunity to everyday investors. And 10,000+ people have already joined them.

Created a former Zillow exec who sold his first venture for $120M, Pacaso brings co-ownership to the $1.3T vacation home industry.

They’ve generated $1B+ worth of luxury home transactions across 2,000+ owners. That’s good for more than $110M in gross profit since inception, including 41% YoY growth last year alone.

And you can join them today for just $2.90/share. But don’t wait too long. Invest in Pacaso before the opportunity ends September 18.

Invest While You Still Can

_{Paid advertisement for Pacaso’s Regulation A offering. Read the offering circular at invest.pacaso.com. Reserving a ticker symbol is not a guarantee that the company will go public. Listing on the NASDAQ is subject to approvals.}

Live Your Best Retirement

by Eric Seyboldt, MBA

Client: Can I afford to withdraw more and do more in retirement? What if I miscalculate, and it’s too late to fix it?

Eric: Most people jump to the numbers. That’s backwards. Retirement without a clear vision is like building a house without a blueprint. Do you want to travel? Stay near the grandkids? Buy land on the Kentucky Bourbon Trail? Work part-time? All of that changes the math. Let’s define your “why” before we even open a spreadsheet.

Client: Okay. But how do I know if I’ve saved enough?

Eric: We calculate your “Retirement Number.” Not a guess. Not a rule of thumb. We forecast your real expenses—healthcare, inflation, taxes, travel—and then reverse-engineer what it takes to fund it. And we don’t just assume 30 years of retirement. We model what happens if you live to 95 or 100. Because running out of money at 88 is not an option.

Client: What if I don’t have enough?

Eric: Then we pivot early. Maybe you delay Social Security, shift more to tax-efficient accounts, or add a guaranteed income source like an annuity. I had a couple in Worthington—both retired teachers—who were short by about $150,000. We restructured their withdrawals, added a part-time consulting gig, and converted part of their 403(b) into lifetime income. They didn’t just stay afloat—they’re thriving.

Client: Speaking of income, where should my retirement paycheck actually come from?

Eric: From layers. Think of it like building a retirement sandwich: Social Security is the base, pensions (if you’re lucky) come next, then we stack in systematic withdrawals from IRAs, Roths, and brokerage accounts. Add a slice of annuity income or rental cash flow if it fits. The goal is stable, predictable income with minimal surprises.

Client: What’s the smartest thing I can do with Social Security? File early? Wait?

Eric: In most cases, wait. Every year you delay past full retirement age, you get an 8% boost. That’s guaranteed. Try finding that in the market. But it depends. If your spouse has a lower benefit, or if you have health concerns, we adjust. Timing Social Security is a chess match—not checkers. However, not waiting also works for a lot of people. You need to look at things holistically.

Client: I’m terrified of healthcare costs eating up everything. How do I plan for that?

Eric: Separate it from your lifestyle budget. Medicare doesn’t cover everything, and long-term care isn’t free. I advise clients to carve out a healthcare bucket. If you have an HSA, even better—it’s triple-tax advantaged. A couple I work with in Dublin set aside $120,000 earmarked purely for healthcare. They sleep better at night.

Client: What if I live way longer than I expect? My dad passed at 70, but my mom is still sharp at 96.

Eric: That’s called longevity risk, and it’s the most underestimated threat in retirement. We use tools like Qualified Longevity Annuity Contracts (QLACs) or staggered income ladders to protect against it. Think of it as financial fuel at the tail-end of life. You wouldn’t drive across the country without a gas plan—don’t retire without one either.

Client: Taxes seem like the wildcard here. What can I do to avoid giving too much to Uncle Sam?

Eric: Taxes are not just a springtime issue—they’re a retirement income issue. We create a withdrawal order: often taxable accounts first, then pre-tax IRAs, and finally Roths. This keeps you in lower brackets longer. I once helped a widow reduce her lifetime tax bill by six figures—just by adjusting which accounts she pulled from first.

Client: What happens if the market crashes the year I retire? Am I toast?

Eric: Not if we’ve done it right. That’s why we build a “bucket strategy.” One bucket for 0–3 years of expenses (safe assets like CDs, cash). One for 3–10 years (bonds, conservative ETFs). And one for long-term growth (equities, real estate). In 2020, a client lost zero sleep because we had two years of expenses parked in cash. No panic. No selling low. Just smart planning.

Client: Final question, Eric. What about leaving money to my kids—or causes I care about?

Eric: We do that with purpose. Not by accident. We set up trusts, legacy IRAs, charitable remainder strategies—whatever fits your values. One of my clients left his church a $250,000 tax-free gift through a life insurance policy—never touched his retirement cash flow. If legacy is part of your goal, it should be baked into the plan—not tacked on later.

There’s no mystery to a successful retirement. It’s not a secret only Wall Street knows. It’s math. It’s timing. It’s flexibility. And it’s having someone who knows the path walk it with you.

Ready to Retire Smarter?

Call Eric Seyboldt at 614-943-2265 to schedule your complimentary 10-minute Retirement Check-In—a no-pressure conversation to make sure your income, taxes, healthcare, and legacy plan are all working in sync.

Because retirement isn’t the time for guesswork. It’s the time for a plan that gives you confidence—for life.

💥 Newsletter Sponsored by Luke’s Property Services 💥

🧼 Ohio’s Most Trusted Name in Power Washing & Window Washing

Is your home’s curb appeal fading fast? You’re not alone—and there’s never been a better time to bring it back to life.

Right now, Luke’s Property Services is offering 10% OFF all power washing services—but only for a limited time (end of May)! Whether it’s your driveway, patio, deck, walkway, or siding, they’ll blast away years of grime in a single visit.

🏠 Before and after? Like night and day.
💧 Equipment? Commercial-grade and eco-friendly.
💪 Results? Shockingly clean—and they speak for themselves.

✅ Trusted by homeowners across Central Ohio
✅ Fast, professional, and always reliable
✅ No-pressure, free quotes — just text or call!

📞 Call or Text Luke’s Property Services Today: (614) 531-6979

Fixed annuities can be an essential component of a well-rounded retirement strategy, offering security, predictability, and efficiency in financial planning. Think of them as CD’s on steroids.

These are current fixed annuity rates and their durations from Top A-rated carriers (subject to change at any time, not FDIC insured):

Rates Are Maxing Out! Don’t Wait To Lock These Fixed Annuity Rates In Today! 6.65% is possible now!

3-year: 5.50% (under $100k Deposited)

3-year: 5.75% (over $100k Deposited)

5-year: 6.10% (under $100k Deposited)

5-year: 6.35% (over $100k Deposited)

7-year: 6.35% (under $100k Deposited)

7-year: 6.65% (over $100k Deposited)

Please feel free to call Eric at 614-943-2265 if you’d like to ask any questions or request information on these fixed annuities or other retirement topics that are on your mind.

REAL ASSETS, Invest Like the Ultra-Wealthy

Invest Like the Ultra-Wealthy: Why Smart Money Is Flocking to Real Assets Like Gold

Let’s call it like it is: the traditional retirement game plan is starting to look outdated. Inflation keeps climbing, the dollar doesn’t stretch like it used to, and central banks continue flooding the system with liquidity. Meanwhile, the markets? Still as volatile and unpredictable as ever.

That’s why today’s smartest investors aren’t sitting on the sidelines—they’re taking action.

They’re turning to gold—a timeless, tangible asset that doesn’t disappear when Wall Street stumbles. Gold has quietly built and preserved wealth through centuries of financial upheaval.

This isn’t just a hedge. It’s a proven strategy for uncertain times.

📌 Gold has stood the test of time as a store of value across every major crisis.
📌 It provides a reliable safeguard against inflation and currency devaluation.
📌 Unlike stocks or bonds, gold is a physical asset you can see, hold, and control on your terms.

When the future feels uncertain, gold offers stability, security, and peace of mind. Make it a cornerstone of your retirement strategy today.

During market chaos, real assets don’t flinch. They thrive. History proves it. While equities tumble, hard assets often surge—shielding portfolios and delivering asymmetric returns when they're needed most.

And even in calm times? They add powerful diversification. That’s why the ultra-wealthy use them as a cornerstone—not a sideshow—in their wealth strategy.

Ask yourself:

🧠 Are you truly diversified?
🧠 What happens to your retirement if inflation stays elevated?
🧠 If the dollar weakens, what asset in your portfolio gets stronger?

If you don’t have a good answer, it’s time for a new conversation.

Allocating funds into the asset class known as “Real Assets” may be a strategy that you should consider.

Ask us how to Rollover a portion of Your IRA or 401k To a GOLD IRA (see link below) and:

• Safeguard your assets from the collapsing dollar

• Incorporate the ‘REAL ASSET’ class into your portfolio like the ultra-wealthy

• Hedge against the current high-inflation conditions

• Protect your retirement assets against economic crises

Just get in touch. We make it easier than ever.

Feedback or Questions?

You’re invited to get in touch with us if you’d like to find out how the Novus Financial Group can help you on your journey to a happy, fulfilling life in Retirement. 

Office: 614-943-2265

Feel Free To Forward Retirement Examined To A Friend and Have Them Subscribe By Clicking The Button Below:

Reach out if you’d like to advertise your business on Retirement Examined or would like to be a sponsor.

Investment advisory services are offered by duly registered individuals on behalf of CreativeOne Wealth, LLC a Registered Investment Adviser.

The content we provide here isn’t financial advice and cannot be taken as such. Please speak to your financial advisor before making any investment decision. Also, note that every investment comes with its risks and drawbacks. Lastly, we would like to remind you that past results cannot guarantee future returns.

This website contains one affiliate link. When you click on the link and make a purchase, we may receive a commission at no additional cost to you. We only promote companies that we have personally used or researched and believe will add value to our readers