Author Topic: How to retire early if all your money is tied up in tax advantaged accounts?  (Read 4436 times)

VirginiaBob

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New reader of the blog.  One question I didn't see discussed on the blog (but did see mentioned as SEPP's in the forum) is how can I retire early if my $600K is tied up in 401K's and IRA's?  Is the answer the SEPP?  Putting those numbers in and my age (37) in this calculator - http://www.dinkytown.net/java/Retire72T.html - it results in an annual income of $20,659.  Just to check, is this the generally accepted solution on this forum?  Is anyone doing something different from the SEPP?

arebelspy

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Roth rollover/conversion ladder/pipeline (goes by several names).

This is the best link/description, IMO: http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

There's lots (dozens) of threads on it if you do a search.

Here's one example:
http://forum.mrmoneymustache.com/index.php?topic=6184.0

Also more reading/other ideas from an MMM blog post:
http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/
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VirginiaBob

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Thanks!  That blog post is exactly what I was looking for.  Also, do I have to grow a mustache?

sobezen

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I like these types of threads too!  Thanks!  Sometimes it can be overwhelming to newer readers, myself included.

Oh grow your mustache! It is almost time for mustaches in Mo-vember. :)

Gone Fishing

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If I had only understood this concept earlier, one of my few regrets...

Roth rollover/conversion ladder/pipeline (goes by several names).

This is the best link/description, IMO: http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

There's lots (dozens) of threads on it if you do a search.

Here's one example:
http://forum.mrmoneymustache.com/index.php?topic=6184.0

Also more reading/other ideas from an MMM blog post:
http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

Beric01

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Roth rollover/conversion ladder/pipeline (goes by several names).

This is the best link/description, IMO: http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

There's lots (dozens) of threads on it if you do a search.

Here's one example:
http://forum.mrmoneymustache.com/index.php?topic=6184.0

Also more reading/other ideas from an MMM blog post:
http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

This topic comes up so often, do you think it would be worth a sticky? I too when I first started saving avoided my 401(k) other than the match, as I didn't want my money locked up inaccessible. Little did I realize rollovers into Roth IRAS (possibly completely avoiding taxes on that income) were so easy. I don't want others to miss out on this great advice...

arebelspy

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This topic comes up so often, do you think it would be worth a sticky?

It's in the FAQ.

If someone doesn't read the FAQ (which is also linked to in the Welcome sticky), AND doesn't do a search for what they're looking for, AND doesn't read MMM's post on it, I'm not sure how much more can be done...

In other words, it doesn't matter how blatant we make it, we'll still see the same question(s) over and over.  That's okay.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

VirginiaBob

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Oh crap - sorry.  I think it was because I searched taxable accounts, not Roth rollover pipeline,since I never heard of it. 

arebelspy

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Oh crap - sorry.  I think it was because I searched taxable accounts, not Roth rollover pipeline,since I never heard of it.

No, no worries, that's what we're here for.  I didn't mean to sound harsh, just trying to explain why adding a million stickies for all the common questions isn't the solution it appears to be.  :)

It's just that sometimes you may get replies (like my first in this thread) that are just a series of links, rather than actual discussion.  That's okay, too.
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

Undecided

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Oh crap - sorry.  I think it was because I searched taxable accounts, not Roth rollover pipeline,since I never heard of it.

No, no worries, that's what we're here for.  I didn't mean to sound harsh, just trying to explain why adding a million stickies for all the common questions isn't the solution it appears to be.  :)

It's just that sometimes you may get replies (like my first in this thread) that are just a series of links, rather than actual discussion.  That's okay, too.

Maybe there should be a sticky about what deserves a sticky. Or maybe there already is ....

arebelspy

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How to retire early if all your money is tied up in tax advantaged accounts?
« Reply #10 on: September 25, 2014, 07:42:31 PM »
Oh crap - sorry.  I think it was because I searched taxable accounts, not Roth rollover pipeline,since I never heard of it.

No, no worries, that's what we're here for.  I didn't mean to sound harsh, just trying to explain why adding a million stickies for all the common questions isn't the solution it appears to be.  :)

It's just that sometimes you may get replies (like my first in this thread) that are just a series of links, rather than actual discussion.  That's okay, too.

Maybe there should be a sticky about what deserves a sticky. Or maybe there already is ....

Hmm, maybe there should be.  Maybe not. Get back to me when you're not Undecided.  :)
We are two former teachers who accumulated a bunch of real estate, retired at 29, and now travel the world full time with two kids.
If you want to know more about me, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.