Alright so I'm pretty heavy into planning withdrawal strategy - we have a few unique things that I don't know if many people consider so I'll lay out the plan here and am open to advice and input on changing things.
First a Roth 401k is not like a Roth IRA in terms of the ease of contribution withdrawals. Here are the main issues as well as a link to an article from an FI CPA blogger - who was on ChooseFI Podcast.
https://fitaxguy.com/roth-401k-withdrawals/1. If you roll it to a roth IRA you start a 5 year clock before you can withdraw any of your contributions.
2. If you leave it as a 401k any withdrawal will include the earnings that it made for instance if your roth 401k is worth 100k and its 50k cont/ 50k earnings. and you withdraw 50k- 25k will be earnings. There is a loop hole to avoid this being taxed the penalty on the 25k. You withdraw 50k and move roll the 25k earnings to a roth IRA.
Margin borrowing vs selling shares.
1. Your money stays invested and margin is variable but currently only 1.59% at IBKR
2. It can be called anytime
3. You can borrow more than 50% currently at IBKR for spending - this is variable as well.
Initial plan was take roth contributions/5 and pull that out each year plus sell taxable at about 40k per year to supplement and get about 4k of contributions from our HSA receipt collection. This gets us right around our fluffyFATfacepunch worthy 85k annual spending.
Flaws in current plan include the issues with 40k of my roth contributions being 401k and my wife has a mega back door roth setup with about 35k of roth 401k backdoor that becomes available based on when it was rolled 5 years later.
Learned about margin and exploring the risk issues but you all know me pretty well i like to live on the edge if i get large efficiency gains so I'll probably push this a bit.
Current plan
https://forum.mrmoneymustache.com/journals/finally-fi-now-what/msg2858926/#msg2858926Note I do have income of 15k expected tax free per year in the yearly spend not seen in the table
One question I've yet to answer is when i pull the money from the Roth 401k and I convert the earnings to Roth IRA can i just put that in my normal IRA and still use the accrued contributions without resetting the clock on it or do I need a whole bunch of separate Roth IRAs