Aggravated: 75% of my money is tied up in qualified plans.

i hear ya. it's why i have always said people need something else cash flowing now. whether rentals, taxable brokerage accounts, lending, trading, other businesses, etc. you want multiple streams of income.

most people are screwed until 59.5 before they can withdraw.

maybe you can trry this

Rule of 55..

72(t)

Are you sure the 10% penalty is a deal breaker? Depending on how much you have in there and your intended retirement lifestyle, it could be possible to absorb that penalty and still retire early. Just a thought.

But yes the early withdrawal penalty is BS.

quote:

---

There is no such thing as early retirement if you tie up all of your money in qualified plans.

---

Sounds like you didnt plan.

I should be able to retire at 50

quote:

---

But yes the early withdrawal penalty is BS.

---

I probably disdain the federal government more than anyone on this board, but from a pragmatic perspective, not really. The reason you're given tax free treatment is as an incentive to save for your own retirement. If you could just pull the money anytime you wanted, only having to pay the taxes you would have originally owed, it would no longer be a retirement vessel; it would simply be an investment vessel. Now sure, one can argue that they should be able to "retire" whenever they want, but the reality is that for every 50 year old that actually manages to retire at 50, there will be a dozen jackasses who are back to being greeters at Walmart in their 70s.

The Feds have laid out the rules pretty cleanly if you want to get the tax advantages of their retirement scheme. If you don't want to follow those rules, you're free to invest for retirement "normally". But taking advantage of the tax free growth and then complaining that the requirements to do so don't precisely fit what you want to do isn't particularly reasonable, in my opinion.

quote:

---

but the reality is that for every 50 year old that actually manages to retire at 50, there will be a dozen jackasses who are back to being greeters at Walmart in their 70s.

---

Some people are fine with that, a low stress job to supplement the money you earned from your high stress corporate rat race gig. This is something I am open to, working a grocery or something job 20 hours a week and being done with the corporate world early.

Doesnt mean someone is a jackass. Wow.

Here's another strategy:

1) Pay the 10% penalty to fund your retirement until you're 54.
2) Get a job at Starbucks or Costco working just enough hours to get into their 401k.
3) Turn 55.
4) Transfer enough money into their 401k from an existing IRA to bridge the gap till you turn 59.5.
5) Retire using the Rule of 55.

*this is not financial advice

quote:

---

It’s actually only a penalty of ~1.5-2.4% since you won’t be paying the payroll taxes that you would have paid had you not contributed the funds to your qualified plan. (6.2%SS/ 1.45% Medicare / .9% extra Medicare over 200k income)

---

This makes sense but never thought of it, but would the number be negated further (even a lower penalty) bc you put the money in an investment that grew too? Like does the math actually become more of a break even or net positive?