Trouble understanding FI goal calculation with tax advantaged accts

[theSweetFix]

In having a conversation with my Mr. this morning, we both realized we're having a hard time grasping how the tax-advantaged accounts factor in our FI calculation. Mostly, we've got joint investing in Vanguard, and then we each have our own 401K and I have a Roth IRA.  When we're crunching the numbers, we keep visualizing not being able to touch ANY of the 401k money until after 65. If this is the case, why wouldn't you calculate a FI goal for living from age ~30 to 65, and then have the second 'stage' hit at 65 when you can easily access your tax advantaged accounts? 

Is this a gamble? Is converting portions of your 401k to an IRA and waiting 5 years enough of a benefit that the tax implications don't eat away at it? 

I think I might be complicating more than necessary. Really just having a hard time conceptualizing...

[AJ]

1. The 401k/IRA withdrawal age is 59.5, not 65
2. There is a loophole called 72t (or Substantially Equal Periodic Payments) that allows you to retire early and access tax-advantaged money.

Edit to add: and welcome to the forums, btw :)

[Secret Stache]

Thats what we do.  We have seperate goals for 2 categories of investing:  Early Retirement fund = more easily accessible (roth, brokerage, properties/mineral rights) and 59 years old and up fund which is our 401k's at the moment.

Just work it backwards by starting with an end game in mind like "In retirement I want to [travel;volunteer;spend time with family] and it will cost approximatley $XX per year to support this."  Once you know what you want you can approximate what your tax sheltered portfolio will look like 15 or 30 years from now based on some assumptions of growth and inflation.  It

[arebelspy]

That's a common strategy.

This article, Why We Don't Max Out Our 401(k)s discusses it well.  Basically get enough in the retirement accounts and then contribute the minimum to get the match and then let them sit for 30+ years.  If you're getting a decent real return, it'll grow large.  I think her 5% real return is optimistic, so I'd plan for a bit more than she is, but we'll see.

Another strategy is to not worry about it and 72(t) it.

To each his own.

[AJ]

Another strategy is to not worry about it and 72(t) it.

To each his own.

Its also going to depend on your tax bracket. We expect to be in a much lower bracket in FI, so its advantageous for us to max our 401ks now and 72t later. If we were in the 15% bracket, it wouldn't be worth it at all.

Another factor might be the investment options your employer provides in your 401k. Some are worse than others...

[theSweetFix]

Thanks fellow Mustachians! We've only been in this game for the last year, so I forget how little we still know.  We basically began by dumping everything we could into Vanguard mutual funds after we maxed out our taxed advantage accounts, and then forgot to continue to educate ourselves. 

Much more reading to do...