Author Topic: Penalties: How do you take money out of IRA and 401k after ER?  (Read 3045 times)

MrsG

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Penalties: How do you take money out of IRA and 401k after ER?
« on: November 18, 2014, 03:00:09 PM »
So when you retire early, whatís up with those penalties for taking the money out of 401k and IRAís? If I plan on retiring early, says I canít take out the money till Iím 59  1/2 without incurring penalties.

How does one go about taking the money out of these accounts? Eat the penalties?

Gone Fishing

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #1 on: November 18, 2014, 03:04:45 PM »
What you need is called an IRA Ladder.  Read the first link in my signature below for details. 

dandarc

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #2 on: November 18, 2014, 03:08:56 PM »
Read up on Roth IRA Ladder, and Substantially Equal Periodic Payments.

MrsG

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #3 on: November 18, 2014, 03:23:36 PM »
Thanks for the point in the right direction.

Using the search terms you gave me, I found this excellent blog post from JL Collins on the exact strategies.

http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

Beric01

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #4 on: November 18, 2014, 03:26:05 PM »
Thanks for the point in the right direction.

Using the search terms you gave me, I found this excellent blog post from JL Collins on the exact strategies.

http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

Yup! This is probably the best article on the Roth ladder (IMO the superior strategy).

dbtx

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #5 on: November 19, 2014, 06:28:37 PM »
There is also 72t withdrawals. That's what I plan on doing though it looks like you have to be very careful with them.

http://72t.net/

Dave


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Icecreamarsenal

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #6 on: November 21, 2014, 10:24:40 AM »
This was a very helpful post. Thanks

dandarc

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Re: Penalties: How do you take money out of IRA and 401k after ER?
« Reply #7 on: November 24, 2014, 03:20:14 PM »
Thanks for the point in the right direction.

Using the search terms you gave me, I found this excellent blog post from JL Collins on the exact strategies.

http://jlcollinsnh.com/2013/12/05/stocks-part-xx-early-retirement-withdrawal-strategies-and-roth-conversion-ladders-from-a-mad-fientist/

Yup! This is probably the best article on the Roth ladder (IMO the superior strategy).
Yes - good to remember the 72t (SEPP) option if your Roth ladder proves inadequate to cover income needs down the road though.  Involves a 5 year prediction, so this is a possibility.