Using Age 55 Rule to get from 55 to 59.5

[dvalley]

Great topic, thanks for posting OP. My retirement age/amount will be pretty much what you're targetting.

Note to self: make sure to have at least 5yrs of after-tax savings/cash and then start converting IRA to ROTH each year.

[brainsagolfer]

SO like many i have chucked a bunch of $ in 401k's of all of my employers. I worked 20 years for one Co, then 6 years, and presently 5 years. I now have what i think may be enough saved to retire early- But of course it is not that easy.
Since i have the 1.3 mil in a IRA (rollover from previous employers) i can only access THAT $ with a 72t, since i am 55.5 YO. BUT if i had that amount in my present employers 401k, they would let me access as much as i want.

WEIRD that the Gubmint would have such different rules....

It seems almost everyone on this site hates the idea of a 72t, but what if you switch employers your whole career and end up with 1.5 mil in an ira, but only 150K in your present employer 401k when you are 56?

I like the 72t idea, but i think the penalty for over withdrawal should be amended. Maybe tell me- hey you took 100 $ too much, We have to penalize you 500$, and you have to return the 100$- makes sense, NO?

I also think the 72t should be able to be used as a bridge to 59.5- why does it have to be 59.5 years old or 5 years - whichever is LONGER?

I have seen a lot of people from my first employer ER after 55 with the 401k exception- sucks i dont have the same option even though i am probably in the same financial position.

[Pilot2013]

Quote:

Originally Posted by brainsagolfer SO like many i have chucked a bunch of $ in 401k's of all of my employers. I worked 20 years for one Co, then 6 years, and presently 5 years. I now have what i think may be enough saved to retire early- But of course it is not that easy. Since i have the 1.3 mil in a IRA (rollover from previous employers) i can only access THAT $ with a 72t, since i am 55.5 YO. BUT if i had that amount in my present employers 401k, they would let me access as much as i want. WEIRD that the Gubmint would have such different rules.... It seems almost everyone on this site hates the idea of a 72t, but what if you switch employers your whole career and end up with 1.5 mil in an ira, but only 150K in your present employer 401k when you are 56? I like the 72t idea, but i think the penalty for over withdrawal should be amended. Maybe tell me- hey you took 100 $ too much, We have to penalize you 500$, and you have to return the 100$- makes sense, NO? I also think the 72t should be able to be used as a bridge to 59.5- why does it have to be 59.5 years old or 5 years - whichever is LONGER? I have seen a lot of people from my first employer ER after 55 with the 401k exception- sucks i dont have the same option even though i am probably in the same financial position.

If you are still employed, and your employer has a 401k program, I think you can roll any required retirement funds over to the 401k plan? Worth a check, then you could have all funds in one (current employer) 401k, retire, and use the Rule of 55.

As I am sure lot of people will point out, you need to check the SPD of the current employer 401k plan to make sure about withdrawal frequency, etc.

[pb4uski]

+1 many 401k plans allow active employees to roll in money from a tIRA to the employer's 401k.

https://www.nerdwallet.com/blog/inve...r-ira-to-401k/

[brainsagolfer]

Quote:

Originally Posted by pb4uski +1 many 401k plans allow active employees to roll in money from a tIRA to the employer's 401k. https://www.nerdwallet.com/blog/inve...r-ira-to-401k/

I was trying so hard to figure out how to get the $ OUT of my present employer 401k that i had not thought of the reverse. I need to check the plan to see if i can take distributions VS lump sum from their plan.

The unfortunate thing is, none of my Mega Corp funds beat the S&P - but the Trowe price funds from my IRA are crushing the S&P- so i may just have to ....sigh....... sigh again......wait a few years

[RE2Boys]

Quote:

Originally Posted by brainsagolfer I was trying so hard to figure out how to get the $ OUT of my present employer 401k that i had not thought of the reverse. I need to check the plan to see if i can take distributions VS lump sum from their plan. The unfortunate thing is, none of my Mega Corp funds beat the S&P - but the Trowe price funds from my IRA are crushing the S&P- so i may just have to ....sigh....... sigh again......wait a few years

Stop putting money into 401k above the match amount and start building up after tax savings that could be used to tied you over to 59.5.

[pb4uski]

^^^^^ good idea