Author Topic: "Retirement" savings vs FIRE savings  (Read 2213 times)

hermoninny

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"Retirement" savings vs FIRE savings
« on: June 18, 2014, 09:18:05 AM »
My husband (35) has never set up any type of 401(k) or IRA for himself - either he worked for a company who didn't offer it or has been self employed.  I only recently found out about SEP-IRA's and Solo 401(k)'s while investigating different ways to invest money.

I'm not really sure how to phrase this, but I'll try to do my best.  If the goal is FIRE, how much of our earnings should be going into investments that can only be withdrawn after age 59.5?  We're just starting to seriously grow our mustache...most of our savings to-date has either been cash emergency fund or employee-sponsored 401(k). 

I invest 10% of my pay in my 401(k) at work to get a 7.5% match, and am looking to start maxing it out this year as my husband's income stabilizes (laid off and then went freelance again in March, just now getting back into regular work.)  We also both have VUL's that we contribute a minimum amount to, pretty much solely to diversify taxable earnings during retirement.  We signed up for this through a friend before I knew much about investing, and I haven't gone back to research it to see if it's really as worthwhile as we were led to believe.

So do I go for the tax savings and open an SEP-IRA or Solo 401(k) for him?  Or do I open a Vanguard account for taxable investments?  Or a combination of both? 

I'm inclined to go for the tax savings so we have more to actually save, but am worried about having too much "untouchable" money, pushing our FIRE date, if the majority of what we are able to save goes into funds we can't touch for 25+ years.

Hope that makes sense...

arebelspy

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Re: "Retirement" savings vs FIRE savings
« Reply #1 on: June 18, 2014, 09:47:19 AM »
There are ways to access the money penalty free.  Do a search for 72(t) and for Roth Rollover.

Most likely the best scenario is max all tax advantaged accounts you can (401ks, HSAs, IRAs, etc.), then put extra in taxable.
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hermoninny

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Re: "Retirement" savings vs FIRE savings
« Reply #2 on: June 18, 2014, 09:52:52 AM »
There are ways to access the money penalty free.  Do a search for 72(t) and for Roth Rollover.


Thanks!  I found a couple posts on conversions (after I posted this, of course!) and will look for 72(t) as well.  The puzzle pieces are starting to come together...

arebelspy

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We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, 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.