Author Topic: FIRE pre 59 1/2  (Read 2245 times)

HAL9000

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FIRE pre 59 1/2
« on: December 12, 2014, 08:59:04 AM »
I am 43, my wife is 41. I am working on my FIRE plan. I would like to be FIRE somewhere in the 50-55 time frame. The problem is that all of our FIRE income is in the form of a 401k, State retirement and SS. All these forms of income by law cannot not kick in until age 59+.

I am aware of the maximizing cutting expenses as much as possible as a piece of FIRE. I also consider SS to be a nice to have, but don't rely on it.

I am assuming for Mustachians, to achieve FIRE pre age 59, it that mean you have to save/invest/own assets that provide income outside of those three previously mentioned income sources. 

So if my assumption is right, it would mean to me that I would have to minimize my 401k contributions (Against my tax advisers recommendation) to invest my surplus net income in one or more investments that provide returns outside of tax deferred investments. Rental property, brokerage acct, etc...


Zummbot

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Re: FIRE pre 59 1/2
« Reply #1 on: December 12, 2014, 09:06:07 AM »
You can utilize a Roth IRA pipeline to withdraw contributions from a 401k penalty free before 59.5.

More info on this thread: http://forum.mrmoneymustache.com/ask-a-mustachian/help-me-understand-the-roth-conversion-pipeline-idea-and-its-benefits/

And more info from Mad FIentist: http://www.madfientist.com/retire-even-earlier/

starguru

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Re: FIRE pre 59 1/2
« Reply #2 on: December 12, 2014, 09:06:14 AM »
You will obviously need some non-retirement saving to cover the years before you can receive those benefits.  Why can't you save something AFTER all your retirement contributions are spoken for?  If you post your income/spending details people will help you find more for savings.

boarder42

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Re: FIRE pre 59 1/2
« Reply #3 on: December 12, 2014, 09:19:16 AM »
There are ways around the 10% penalty on early withdrawal. But there is no law against withdrawing early. 90% of my savings fall into those categories and I will retire at the ripe old age of 38. As mentioned above it can be done. Read those posts.

boarder42

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Re: FIRE pre 59 1/2
« Reply #4 on: December 12, 2014, 09:21:22 AM »
Also sepp 72t may make a lot more sense for you as you will be very close to the 59.5 age.

FIPurpose

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Re: FIRE pre 59 1/2
« Reply #5 on: December 12, 2014, 10:44:08 AM »
If you plan on retiring at 54/55. You can withdraw the 401k money without penalty. Basically leave your work in the calendar year you turn 55, and that 401k is then available to you.