Author Topic: Im sure this has been asked before (Roth IRA)  (Read 5268 times)

JD_79

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Im sure this has been asked before (Roth IRA)
« on: April 05, 2013, 10:23:30 AM »
Thanks for all the help with my previous questions guys.  I'm sure this has been asked before but when deciding if you are able to retire early, how do you figure your IRA, 401k, etc into it?  I know you arent supposed to touch this money until 59 1/2, so do you kind of figure two retirements, like if I retire at 45 do I have enough for 15 years until I can get my other money?

Does this make sense?  Again, sorry if its been asked before.

JD

matchewed

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Re: Im sure this has been asked before (Roth IRA)
« Reply #1 on: April 05, 2013, 10:44:17 AM »
Well it depends on your plan/strategy.

If we assume all you want to do is grow a stash and not look for alternative sources of income such as rentals or part-time entrepreneurship, an individual FIREing would need to ensure that either -
a) they have enough assets in a ROTH (would have to be principal withdrawals only) or taxable accounts to carry them to 59.5
b) They use 72(t) distributions
c) They have some of a) but then use a ROTH pipeline when they have 5 years left in their ROTH or taxable (this can be done earlier of course it doesn't have to be 5 years that's just the hold time on a rollover).
d) Marry a rich man/woman. ;)

It also depends on risk tolerance and how much money you have in these various accounts. And honestly there are many many ways to do a, b, and c and technically you can do any and all of them I believe (I'm not an accountant or tax expert so take what I have to say as it is... a dude on the internet).

I hope this somewhat answers your question.

JD_79

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Re: Im sure this has been asked before (Roth IRA)
« Reply #2 on: April 05, 2013, 10:55:55 AM »
Thanks.

My ignorance is showing again, so you can withdraw from a roth before 59 1/2?

I should have worded things better.  I'm maxing out a Roth, have a simple IRA and a rollover from a previous job (Group A) and after I pay all my debt off, will start investing heavily, probably in Vanguard Index funds (Group B).  So I figure I have to have enough in group B, when I retire to get me to Group A.

Does that make sense?

JD

rtrnow

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Re: Im sure this has been asked before (Roth IRA)
« Reply #3 on: April 05, 2013, 11:03:08 AM »
Thanks.

My ignorance is showing again, so you can withdraw from a roth before 59 1/2?


JD

You can deduct your contributions but not any gains. So if you max it this year, that's $5,500 you can withdraw anytime after the first 5 years.

madage

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Re: Im sure this has been asked before (Roth IRA)
« Reply #4 on: April 05, 2013, 11:17:24 AM »

You can deduct your contributions but not any gains. So if you max it this year, that's $5,500 you can withdraw anytime after the first 5 years.

You can withdraw your contributions at any time without penalty. The five year rule applies to earnings only.
http://www.obliviousinvestor.com/roth-ira-withdrawal-rules/

Chris

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Re: Im sure this has been asked before (Roth IRA)
« Reply #5 on: April 05, 2013, 12:53:46 PM »

JD_79

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Re: Im sure this has been asked before (Roth IRA)
« Reply #6 on: April 05, 2013, 02:06:35 PM »
Thanks guys.

JD