Keep investing in your 401(k)! Max that thing out every year!
See http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/ and https://seattlecyclone.com/accessing-your-retirement-accounts-early-yes-you-can/ for more information.
Got it thanks. I've read those early withdrawal articles before but they seem horribly complicated, and I'd prefer to wait until 59.5 but the tax benefits are very appealing.
Keep investing in your 401(k)! Max that thing out every year!
See http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/ and https://seattlecyclone.com/accessing-your-retirement-accounts-early-yes-you-can/ for more information.
+1.
And: http://www.madfientist.com/retire-even-earlier/
Got it thanks.
One more link
http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/
So while I still advise maxing out any tax-deferred savings accounts like the 401k, you’ll also need to invest elsewhere simultaneously.
Got it. I have two rental properties as well, and invest in taxable items as well, but was really wondering when to stop the 401 contributions.
Hi There,
My wife and I have circa $300K in tax deferred Roth and 401K contributions.
Just a nit-pick, but there's no such thing as a "tax deferred Roth". Do you mean you have $300k in traditional IRA and 401(k) accounts?
Lots of good links others have shared on accessing tax deferred accounts early. One more thing to consider - just pay the penalty. At $60k yearly expense and married filing jointly, you'd be in the 15% bracket in retirement most likely. If you're deferring income now at the 25% or higher marginal rates, then even if you pay a 10% penalty to access it you're not any worse off than you are now. Certainly that's doable for the 5 years until you get a Roth ladder going. I'm in the same position (though I'm older), and I figure my goal for the rest of my life is not to pay 25% federal tax on anything if I can avoid it.
We have retirement in our Roth's and tax deferred money in my solo 401K, is that better? I am going to start backdooring $5K into each roth per year as well. Just need to get my accounts in line with vanguard. My tax bracket with state/fed/corporate/ssi/medicare/etc is 33% as of last year. I write off much of my life, and saved $74,500 via the solo 401K last year which helps my tax bracket tremendously. If I could convince the wife to move to Nevada or texas that would immediately drop to 23%.
Beyond all the info about how to access your retirement accounts early, I just don't see how you get from $300k to $1.5 million in nine years without having a good chunk of taxable savings. Even if you're both able to max out mega backdoor Roth accounts in your 401(k), you'll need some very good investment returns to make that work. Even if that does describe you, you'll have a good chunk of mega backdoor Roth principal to withdraw during the first few years of your retirement where you'll be converting your tax-deferred accounts to Roth.
I can save $74,500 via my solo 401K per year. $52,000 for myself and $22,500 via my wife as my "employee" for total of $74,500, this time 10 years is $745,000, plus I have $300,000 already which gives my retirement savings money at the 10 year mark $1,045,000. Seeing this grow to $1.5 million over the course of 10 years seems very doable. Plus I will be saving an additional $90,000 of after tax money and either A) paying down my mortgage or B) investing in taxable equity accounts or C) investing in rental property, depending on how I feel. I will likely start paying down the mortgage fairly aggressively so that come the 10 year mark, I'll be mortgage free and have my retirement accounts, plus taxable accounts, plus investment properties. So I think I'd be in a good position at that point. But everyone hear says to stuff my 401K so that's what I'm going to do!!!!!!!!!!!!!!!!!!
