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

quote:

---

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?

---

You're also not saving for retirement anymore. That 10% you've been setting aside? It's no longer coming out of your funds.

quote:

---

72(t) is how the tax code addresses this already. You can start retirement at any age penalty free. Just have to lock into taking withdrawals for at least 5 year or when you turn 59.5 whichever is longest. And the allowable withdrawal rate is based on life expectancy so you wont blow through it all too quickly. If you return to work out of necessity or choice after that point (59.5 and 5 yrs of withdrawals), the withdrawals can be stopped.

So, if you want to raid 401k to buy a bass boat or RV at 50 you're gonna be penalized. If you are legit early retiring then commit to 72(t) and there is no penalty as it should be.

---

TIL about "SoSEPP". Didn't know that; I appreciate you

quote:

---

I’ve had enough with the rat race.

So I added up all my qualified plan assets: ROTH, IRAs, 401k etc.

Nice amount in there to where I and the wife could live very comfortably off 5% interest on the principal (without ever touching the principal balance).

Thing that pisses me off is that we can’t touch any of this money without a penalty due to age.

Bastards have us until at least 59.5

I realize now these pieces of shite put this 55 yr age min on purpose so they can chain us to a job and continue contributing to SS until at least 59.5

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

On top of that, I don’t want to contribute to SS any longer. I’ve done my 40 quarters and then some.

I would gladly take less a payout at say 55 if that meant I could get off this work train.

Yeah I’m tired and have had enough.

I want my money now.

So where’s the off the ramp for those that lived frugally, saved, saved early on and have had enough?

---

Nobody made you contribute the majority of your available funds to tax advantaged accounts. You could have foregone tax savings from your traditional IRA and traditional 401(k) contributions this entire time and simply purchased assets in a taxable brokerage account (which, depending on your marginal tax rates before and after retirement, may not have been a wise move). Your choice over time was to sacrifice future flexibility of withdrawals in exchange for a lowered tax bill. Your Roth IRA or Roth 401(k) contributions are not even subject to this penalty, just the earnings.

https://www.madfientist.com/how-to-access-retirement-funds-early/

quote:

---

Can you go into more detail around brokerage accounts and your approach. What makes you say may be too late? An assumption of age?

---

It was under the assumption OP is early 50’s due to being disgruntled with the fact he has to wait until he is 59.5 before he can access retirement.

The too late remark was that it may be too late to build a sizeable next egg in a brokerage to live off of for early retirement before said retirement funds would be accessible penalty free.

My approach is this. I am 35. Very loosely intend to retire in some capacity by 55. Started taxable brokerage 5years ago and intend to continue funding until I am 40. Compounding can then take over and that would be enough to hold us over plus some until we access retirement funds.

It’s also an extension of the emergency fund if shite ever really hits the fan. The flexibility of the taxable brokerage is its best quality.