Author Topic: Tax-deferred retirement accounts or Taxable accounts for FIRE?  (Read 739 times)

wearfannypacks

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Tax-deferred retirement accounts or Taxable accounts for FIRE?
« on: October 08, 2016, 02:26:42 PM »
We plan to hit FIRE by 35.

A big portion of our personal endowment is going into tax deferred retirement accounts (SEP IRAs). We like the tax savings now, but I'm wondering if we will kick ourselves at FIRE. Will not having access to it for another 25 years mess with our ability to stay retired?

 I'm estimating it to be about 60/40 tax deferred/taxable.

« Last Edit: October 08, 2016, 02:42:34 PM by wearfannypacks »

seattlecyclone

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Re: Tax-deferred retirement accounts or Taxable accounts for FIRE?
« Reply #1 on: October 08, 2016, 03:10:05 PM »
You can access this money at any time. See this thread about two ways to access the money early without owing a 10% early withdrawal tax.

Even if these methods don't work for you, it's quite possible that your tax bracket during retirement will be 10% lower than it is now. If that's the case, you would still be better off paying the extra 10% early withdrawal tax than you would be if you skipped the tax savings today.