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If I understand your original question was how to make withdrawals from your IRA before age 59.5.

Converting part of your IRA to a ROTH IRA may be a partial solution. If you partially convert to a roth in 1998 (and pay taxes, but you've got to pay them sometime) you can withdraw the converted amount (it counts as a contribution) tax and penalty free after 1/1/2003.

So assuming you want to retire in 2003 at age 55, convert
say $10K a year in 1998-2002. In 2003 you can make annuatized withdrawals of $20K a year and suppliment that by withdrawing your $10K of contributions from the ROTHS each year.

I'm assuming that there are no unpleasent interactions between the ROTH and annuatizing the rest of the IRA. I'd be interested in what the experts say.

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