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NW crossed a million
Old 09-18-2017, 01:00 PM   #1
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NW crossed a million

Spreadsheet reads $1,000,944.10.

A substantial 401k deposit should happen any day which will provide a decent buffer, but I imagine I'll get to cross it a few more times in the near term.

FWIW, the timeline to this point:

July '05: ~0
Nov '09: NW 108k
Nov '13: NW 504k
Sept '17: NW 1mil

I'm 35 so it's a good start but honestly it was quite anticlimactic especially since 401k is nearly half and it can't be touched for another 20-25 years and the after tax amount isn't close to bridging that gap, retirement isn't imminent.

I suppose next milestone is investments passing $1mil, as currently they are only 780k of the total.
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Old 09-18-2017, 01:17 PM   #2
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It took me my entire working life to hit that mark. You did it in 12 years, I would say you are killing it.

Im not familiar with your situation but children, divorce , and other various things happen that seem to stall building a nest egg.

Keep doing what your doing , early retirement is in your grasp.
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Old 09-18-2017, 01:38 PM   #3
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Thanks Blue Collar Guy, it's a good start and I'm pretty lucky, but it still feels like a long ways to go... based on what 25 year old me thought having 1mil would feel like.
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Old 09-18-2017, 01:47 PM   #4
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You're definitely killing it. I didn't get there until 45.
Now the compounding has started to kick in and the digit counters keep rolling. Keep doing what you're doing and it will snowball.
Give some thought to pumping up the after-tax accounts. I wish I'd done more of that. Didn't expect to be looking at hanging it up this early. With the compounding it sort of snuck up on me. If I'd put more in after tax accounts, I'd probably be ready to call it quits.
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Old 09-18-2017, 02:02 PM   #5
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About a year ago I started looking at that, I don't think I "need" any more deposits into 401k... of course I'm not going to say no to the match

It would be great to retire/stop working for someone else by 45, but after tax is currently around $315k... not bad but need much more to bridge a 20ish year gap.
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Old 09-18-2017, 02:06 PM   #6
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Congratulations!!

45 sounds like a great goal... but just remember that you can't access tax-deferred accounts without paying a 10% penalty other than a SEPP/72t before you are 59 1/2 so if you want to retire at 45 it woudl be good to have money saved in taxable accounts that you can access without penalty
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NW crossed a million
Old 09-18-2017, 02:26 PM   #7
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NW crossed a million

Quote:
Originally Posted by pb4uski View Post
Congratulations!!

45 sounds like a great goal... but just remember that you can't access tax-deferred accounts without paying a 10% penalty other than a SEPP/72t before you are 59 1/2 so if you want to retire at 45 it woudl be good to have money saved in taxable accounts that you can access without penalty


Actually that isn't entirely accurate

"Another less well-known option: You can avoid the withdrawal penalty at any age, and for any reason, by beginning "substantially equal periodic payments" from an IRA. The catch here is you must continue taking these payments for five years or until you are 59 1/2 (the age you can normally start taking from an IRA penalty free), whichever comes later--even if you no longer need the cash. Incredibly, there are three possible ways to calculate the periodic payout. In the simplest, which produces the smallest annual payout, you divide the IRA's total value by your remaining life expectancy. "

As i recall this stuck in my head when i heard it in tax class years ago..but at 63 I guess i missed the boat... For most people it is best they don't know about this option...


https://www.forbes.com/sites/janetno.../#137721173f4c
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Old 09-18-2017, 02:28 PM   #8
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Originally Posted by Blue Collar Guy View Post
It took me my entire working life to hit that mark. You did it in 12 years, I would say you are killing it.

Im not familiar with your situation but children, divorce , and other various things happen that seem to stall building a nest egg.

Keep doing what your doing , early retirement is in your grasp.
+1 on the "stall" drivers BCG!
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Old 09-18-2017, 03:11 PM   #9
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Congratulations! Nice example of exponential growth.

FN
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Old 09-18-2017, 04:00 PM   #10
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Engprodigy, is any of your 401k money in employer stock? If so, you may be able to cash it out at lower tax rates (NUA) when you leave the company. In my case, about 1/2 of my 401k was employer stock but it gave me a huge boost in my after-tax account when I began my ER 9 years ago.
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Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

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Old 09-18-2017, 05:41 PM   #11
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Welcome to the " Two Comma" club!
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Old 09-18-2017, 05:55 PM   #12
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Well done!
If you have five years of living expenses in an after-tax account, you can do Roth conversions from a traditional IRA and access tax deferred money that way without any penalties before 59.5. The benefits of tax deferral should not be given up because you NEED to have money in an after-tax account.
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Old 09-18-2017, 06:13 PM   #13
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Quote:
Originally Posted by pb4uski View Post
Congratulations!!

45 sounds like a great goal... but just remember that you can't access tax-deferred accounts without paying a 10% penalty other than a SEPP/72t before you are 59 1/2 so if you want to retire at 45 it woudl be good to have money saved in taxable accounts that you can access without penalty
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Actually that isn't entirely accurate

"Another less well-known option: You can avoid the withdrawal penalty at any age, and for any reason, by beginning "substantially equal periodic payments" from an IRA.
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NW crossed a million
Old 09-18-2017, 07:33 PM   #14
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Originally Posted by SecondCor521 View Post
Few know about this and truly it's been a while since my ms in tax but it is accurate ...well it was. The forbes article seems to validate it is still accurate..

RayinPenn
MBA, MS. ...by the by means little
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Old 09-18-2017, 08:57 PM   #15
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Originally Posted by pb4uski View Post
Congratulations!!

45 sounds like a great goal... but just remember that you can't access tax-deferred accounts without paying a 10% penalty other than a SEPP/72t before you are 59 1/2 so if you want to retire at 45 it woudl be good to have money saved in taxable accounts that you can access without penalty
I'd forgotten about SEPP, thanks for the reminder.

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Originally Posted by scrabbler1 View Post
Engprodigy, is any of your 401k money in employer stock? If so, you may be able to cash it out at lower tax rates (NUA) when you leave the company. In my case, about 1/2 of my 401k was employer stock but it gave me a huge boost in my after-tax account when I began my ER 9 years ago.
No employer stock to take advantage of that scenario.
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Old 09-18-2017, 09:30 PM   #16
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Few know about this and truly it's been a while since my ms in tax but it is accurate ...well it was. The forbes article seems to validate it is still accurate..

RayinPenn
MBA, MS. ...by the by means little
Uh, yeah. I know about SEPPs.

My oblique point is that you called pb4uski's response not entirely accurate, and then went on to point out about SEPP's. However, pb4uski's response did include a mention of SEPP's - see the part of his response that I bolded.

So either pb4uski's response was, in fact, entirely accurate, or I'm missing something more subtle in your response.

...

Well, in fact there is another way to avoid the 10% penalty, called a Roth pipeline, so pb4uski's response isn't entirely accurate. But it's not inaccurate due to a lack of mentioning SEPP's.
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NW crossed a million
Old 09-19-2017, 05:56 AM   #17
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Uh, yeah. I know about SEPPs.

Apologies I don't believe I ever heard of that provision referred to as SEPPs. (Substantially Equal Periodic Payments) but as I explained it has been years.

It is a very important provision for say a 50 year old in a highly successful company with couple million in his/her 401K. Who is ready to bail out - would you say? I think there are more of them than most of us would think. And as i said its perhaps good that not to many are aware of this provision.
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Old 09-19-2017, 06:01 AM   #18
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+1 on the "stall" drivers BCG!
+2...nothing like divorces 10 years apart to reset the "awcrap" meter....

Congrats OP...my timeline was similar but much older thanks to the things BCG mentioned, to make that NW by 54, and only thanks to sweat equity sales and timing the real estate bubble. This bull market has made compounding seem much easier than it is, so don't be fooled in to a false sense of facility.
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Old 09-19-2017, 08:58 AM   #19
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Congratulations!!

45 sounds like a great goal... but just remember that you can't access tax-deferred accounts without paying a 10% penalty other than a SEPP/72t before you are 59 1/2 so if you want to retire at 45 it woudl be good to have money saved in taxable accounts that you can access without penalty
Thats not true...you can access the money without penalty by doing Roth conversions.

How to Access Retirement Funds Early | Mad Fientist
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Old 09-19-2017, 09:00 AM   #20
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Well done!
If you have five years of living expenses in an after-tax account, you can do Roth conversions from a traditional IRA and access tax deferred money that way without any penalties before 59.5. The benefits of tax deferral should not be given up because you NEED to have money in an after-tax account.
This...don't give up tax deferred space to invest in after tax account just because you think you can't access the money. That isn't true.
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