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09-18-2017, 01:00 PM
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#1
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Recycles dryer sheets
Join Date: Jan 2011
Posts: 66
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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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09-18-2017, 01:17 PM
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#2
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Thinks s/he gets paid by the post
Join Date: Mar 2017
Location: New York City
Posts: 2,838
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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.
__________________
Withdrawal Rate currently zero, Pension 137 % of our spending, Wasted 5 years of my prime working extra for a safe withdrawal rate. I can live like a King for a year, or a Prince for the rest of my life. I will stay on topic, I will stay on topic, I will stay on topic
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09-18-2017, 01:38 PM
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#3
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Recycles dryer sheets
Join Date: Jan 2011
Posts: 66
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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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09-18-2017, 01:47 PM
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#4
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Recycles dryer sheets
Join Date: Oct 2015
Posts: 91
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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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09-18-2017, 02:02 PM
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#5
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Recycles dryer sheets
Join Date: Jan 2011
Posts: 66
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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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09-18-2017, 02:06 PM
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#6
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,266
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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
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-18-2017, 02:26 PM
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#7
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,867
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NW crossed a million
Quote:
Originally Posted by pb4uski
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. 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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09-18-2017, 02:28 PM
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#8
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gone traveling
Join Date: Mar 2015
Location: Greenville
Posts: 653
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Quote:
Originally Posted by Blue Collar Guy
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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+1 on the "stall" drivers BCG!
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09-18-2017, 03:11 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Mar 2008
Location: Atlanta Suburb
Posts: 1,499
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Congratulations! Nice example of exponential growth.
FN
__________________
"Oh, twice as much ain't twice as good
And can't sustain like one half could
It's wanting more that's gonna send me to my knees" - John Mayer
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09-18-2017, 04:00 PM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2009
Posts: 6,683
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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.
__________________
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.
"I want my money working for me instead of me working for my money!"
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09-18-2017, 05:41 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Posts: 1,085
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Welcome to the " Two Comma" club!
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09-18-2017, 05:55 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Nov 2013
Posts: 1,032
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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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09-18-2017, 06:13 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,866
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__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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09-18-2017, 07:33 PM
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#14
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,867
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NW crossed a million
Quote:
Originally Posted by SecondCor521
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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
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09-18-2017, 08:57 PM
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#15
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Recycles dryer sheets
Join Date: Jan 2011
Posts: 66
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Quote:
Originally Posted by pb4uski
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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I'd forgotten about SEPP, thanks for the reminder.
Quote:
Originally Posted by scrabbler1
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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No employer stock to take advantage of that scenario.
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09-18-2017, 09:30 PM
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#16
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2006
Location: Boise
Posts: 7,866
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Quote:
Originally Posted by rayinpenn
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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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.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
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09-19-2017, 05:56 AM
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#17
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Thinks s/he gets paid by the post
Join Date: May 2014
Posts: 1,867
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NW crossed a million
Quote:
Originally Posted by SecondCor521
Uh, yeah. I know about SEPPs.
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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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09-19-2017, 06:01 AM
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#18
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Full time employment: Posting here.
Join Date: Aug 2015
Posts: 987
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Quote:
Originally Posted by Pilot2013
+1 on the "stall" drivers BCG!
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+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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09-19-2017, 08:58 AM
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#19
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Dryer sheet wannabe
Join Date: Jun 2017
Posts: 15
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Quote:
Originally Posted by pb4uski
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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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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09-19-2017, 09:00 AM
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#20
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Dryer sheet wannabe
Join Date: Jun 2017
Posts: 15
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Quote:
Originally Posted by NgineER
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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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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