Hello all,
I'm just stepping onto the path of Badassity, but need a little clarification on just how it works in the later stages.
Right now, I have a Roth IRA, Roth 401k, and general investment account, the first two of which I am maxing out annually, and the rest I slush as much as possible into from my monthly budget. I have them all dumping into either VTSMX or VFINX, and am just buying steadily regardless of market conditions. Based on my current estimates, using this strategy I should be able to retire with 25x of my desired retirement income invested as a sum of all three accounts in about 16 years (~age 40).
My confusion is just HOW I get money out of those accounts and into my spending stream. With the general account, it's simple enough that I can withdraw the dividends paid out and/or the principle/gains whenever I want. How I get funds out of the 401k/IRA pre-59.5 is what's confusing me. I'm worried that by using the IRA/401k, over half of my retirement funds will be locked away where I can't get to them when I want to retire. If I've read correctly, I really can't get anything except my principles out of those two accounts until I hit 59.5, no?
So my questions:
1. I understand the Roth pipeline, but if it is ultimately funded by my 401k, why not simply have the IRA sit there while maxing out my 401k and general savings, then doing the 401k-IRA trick down the road? This would put $5500/yr into my general account, which I have easier access too.
2. Really, why not put everything into my general account, so I don't have to worry about all the restrictions on withdrawals? Is it mostly an issue of saving on taxes?
3. I haven't seen anyone talking about Roth 401ks around here. Are they not recommended for mustachians? I definitely work in a higher tax bracket now than I will retire (early or not) into.
I tried to search out these questions, so hope I'm not beating a very dead horse here for you all. Thanks a bunch for the help!