Factoring 401k plans in FIRE calculations

[Tree-dweller]

DH retired a couple of years ago and initially left some money in his 401k but the options for withdrawal were very limited. Also, the options for investment were not horrible but very limited.

And, the big thing is that you say you have fees of .05%. (I assume you really mean .50% as fees of .05% would be unusually low). If all fees really are .05% then that is fine. But assuming it is really.50% (one-half of one percent) then you can do much better at Vanguard.

No, the fees are point-zero-five percent, with no limits on withdrawals and respectable investment options. I guess I got a good one.

 

[kaneohe]

The thing that I don't know is whether the SPIA would be subject to the 10% early distribution penalty if you are less than 59 1/2 when you receive them. Check with your IRA/annuity provider.

Retirement Topics - Tax on Early Distributions

Retirement Topics - Tax on Early Distributions


Generally, the amounts an individual withdraws from his or her IRA or other qualified retirement plan before reaching age 59½ are called ”early” or ”premature” distributions. Individuals must pay an additional 10% early withdrawal tax and report the amount to the IRS for any early distributions, unless an exception applies.

Exceptions: There are several exceptions to the age 59½ rule. Even if individuals receive a distribution before they are age 59½, they may not have to pay the 10% additional tax if they are in one of the following situations.
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They are receiving distributions in the form of an annuity.