Author Topic: Should I completely stop all 401k/IRA contributions?  (Read 3606 times)

surlygirl

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Should I completely stop all 401k/IRA contributions?
« on: September 04, 2015, 08:11:52 AM »
Hi all, new to the forums, but I've been reading the blog for a few years.  I'm trying to get laser focused on ER and just need guidance from those who have done. 

I'm 38yo, and I've got over $200K in Trad/Roth IRAs at the moment (though mostly in Traditional, where I can't touch a penny of it without penalties for another 20ish years). Obviously, I need to start throwing much more money into non-tax-sheltered investment vehicles to see me through the years until I can tap into my conventional nest egg.  The question is - do I stop contributing completely and put everything into regular investments?  Or do I still throw a little bit of money into an IRA?  I'd think that one of the things that's hugely important during ER and to stay FI is understanding and minimizing tax implications, but perhaps I'm still stuck in the "conventional wisdom" of thinking your 401k/IRA is the key to a successful retirement.

Those who have BTDT or are close - what say ye?

dandarc

  • Magnum Stache
  • ******
  • Posts: 3210
  • Age: 36
Re: Should I completely stop all 401k/IRA contributions?
« Reply #1 on: September 04, 2015, 08:15:02 AM »
The concern about accessing your retirement accounts before 59.5 is misplaced.  The thread linked below covers a few techniques for getting around that.

http://forum.mrmoneymustache.com/investor-alley/how-to-withdraw-funds-from-your-ira-and-401k-without-penalty-before-age-59-5/

dandarc

  • Magnum Stache
  • ******
  • Posts: 3210
  • Age: 36
Re: Should I completely stop all 401k/IRA contributions?
« Reply #2 on: September 04, 2015, 08:16:17 AM »
And the conventional wisdom is right on this one.  Probably more right for an early retiree who is going to be careful about tax issues than for your more average person.  Max those tax-advantaged accounts!

Gone Fishing

  • Magnum Stache
  • ******
  • Posts: 2722
  • So Close went fishing on April 1, 2016
    • Journal
Re: Should I completely stop all 401k/IRA contributions?
« Reply #3 on: September 04, 2015, 08:16:27 AM »
The links in my signature line may also be helpful to you.

surlygirl

  • 5 O'Clock Shadow
  • *
  • Posts: 13
Re: Should I completely stop all 401k/IRA contributions?
« Reply #4 on: September 04, 2015, 08:19:37 AM »
Sweet, thanks for the quick replies.  I also juuuuust now found a blog post that covers it a bit too. 

http://www.mrmoneymustache.com/2011/11/11/how-much-is-too-much-in-your-401k/

Oy.  And I thought I'd read most of the posts.  Looks like I've got some homework to do this weekend :)

smiller257

  • 5 O'Clock Shadow
  • *
  • Posts: 47
  • Age: 56
  • Location: Panama City Beach, FL
  • Enjoys lifestyle freedom & financial independence
    • We Retired Early
Re: Should I completely stop all 401k/IRA contributions?
« Reply #5 on: September 05, 2015, 06:31:07 AM »
I retired at 50, so I can't touch my IRA/401k yet either, but I have plenty of taxable investments (stock and bond funds). If you getting a 401k match, I would certainly invest up to the match (why not, it's free money) and then put the rest in taxable index funds.

Zamboni

  • Handlebar Stache
  • *****
  • Posts: 2133
Re: Should I completely stop all 401k/IRA contributions?
« Reply #6 on: September 05, 2015, 07:21:27 AM »
Lots of good advice here already. Mostly I am posting to tell OP that I like her avatar.

sistastache

  • 5 O'Clock Shadow
  • *
  • Posts: 65
Re: Should I completely stop all 401k/IRA contributions?
« Reply #7 on: September 05, 2015, 03:06:46 PM »
Lots of good advice here already. Mostly I am posting to tell OP that I like her avatar.
Word.

El Marinero

  • Stubble
  • **
  • Posts: 136
  • Location: East Bay
Re: Should I completely stop all 401k/IRA contributions?
« Reply #8 on: September 09, 2015, 02:09:46 PM »

NoNonsenseLandlord

  • Bristles
  • ***
  • Posts: 396
  • Age: 59
  • Location: Eagan, MN
    • No Nonsense Landlord
Re: Should I completely stop all 401k/IRA contributions?
« Reply #9 on: September 09, 2015, 05:52:29 PM »
I always max out my 401K, did it by mid-march this year.  The full $24K.

You will be glad you did.  Less taxes now.  You can still fund a Roth potentially too.  If you have an HSA, make sure that is 100% funded.  That is the best.