Author Topic: early retirement and avoiding penalties  (Read 1728 times)


  • 5 O'Clock Shadow
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early retirement and avoiding penalties
« on: August 08, 2016, 06:55:18 PM »
Hi  im looking for information on retiring early. Both my wife and i are under 55 . We have been consulting with financial advisors and they dont think we are ready to retire yet at our age . I see on this forum information about financial advisors are a lot of times telling people they shouldnt retire early. As social security is still so far away . And we would be heavily taxed on our assets because we are prior to 591/2. Although i read there are ways around these taxes if you set up and follow the rules closely.
One advisor wanted us to take our assets put in a annuity and use the 72t method .As we would need to draw on our assets until we reached social security at age 62 . Although his fees would go on forever.
Any info or strategy anyone has used to accomplish early retirement would be greatly appreciated.


  • Walrus Stache
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  • Magnum Stache
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Re: early retirement and avoiding penalties
« Reply #2 on: August 09, 2016, 02:05:40 PM »
Annuities make the financial advisor rich, but they don't help you very much. I just got done looking at these for my Mom.  If you're interested in a recurring income stream, look at high dividend returning stocks, or a dividend index fund like VIG or VWELX. Some folks like closed-end funds, those typically work by returning some of your own capital to you on a monthly basis (kind of like an annuity). They're a bit too complex for my tastes.

Disadvantage of annuities include:

* High up front sales commission paid to the salesman
* Your returns are dependent on the company remaining solvent
* Typically low/no control over investments funding the annuity
* Money is gone - nothing to leave your inheritors.
* Company typically invests conservatively and takes the margin between your annuity and their profit goal.

* Predictable income

These should mitigate risk, but in a financial meltdown, you'd need to worry about the company staying solvent. If you wanted to build your own annuity, you could do that too, and avoid all the sales and profit overhead.