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need info on early retirement
Old 02-10-2018, 09:16 AM   #1
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need info on early retirement

I am 46 and want to retire at 50. I will have a pension, 457b and IRA's both Trad. and Roth. My pension and the 457b I should be able to get when I retire at 50 but can I access my IRA's at 50. If not what age can I access them without penalty. Also what tricks can I do to keep penalties or taxes down.
My wife wants to also retire at 50 but that depends on if she can without penalties. She has a 401k and IRA's also and wanting to pay no penalties and little to no taxes if possible on her side as well.
Any help on tricks or conversions or whatever to accomplish this is much appreciated.
Thanks
Greg
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Old 02-10-2018, 10:24 AM   #2
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Look up Rule 72(t), Greg. Not a trick, as it is within the rules.
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Old 02-10-2018, 10:44 AM   #3
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The Roth IRA's would give you some options. Contributions can be withdrawn tax-free (well, you already paid taxes on them).
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Old 02-10-2018, 11:46 AM   #4
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Look up Rule 72(t), Greg. Not a trick, as it is within the rules.
Thank you for the suggestion, I just read a article on that rule. Our problem is that we do not have a lot in our IRA's. So to take equal withdrawals based on our life expectancy would net us too small of a amount per year to make a difference.
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Old 02-10-2018, 11:52 AM   #5
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I have excess money to invest, is there any more pre tax things I can invest in. Then what do you recommend investing in from a little to a lot to generate a income stream. We are currently maxxing out all current accounts, HSA included.
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Old 02-10-2018, 11:56 AM   #6
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I have read about the age 55 for early withdrawal of 401k but I need clarification. Wife's bday is in July, so can she take withdrawals Jan 1st of the year she turns 55 or on her 55th bday.
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Old 02-10-2018, 12:12 PM   #7
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so can she take withdrawals Jan 1st of the year she turns 55 or on her 55th bday.
No. Re-read the rules carefully. Not all 401k allow the 55 rule and only the 401k that employed you when you retired at. Further restricted as:
Quote:
Distributions made to you after you separated from service with your employer if the separation occurred in or after the year you reached age 55
Otherwise, if you have too much in 401k and not enough in IRA, you can always rollover an old employer 401k to your IRA, then do 72t on the IRA. In fact if you have multiple IRA accounts, you co do 72t on some and not others if you want better control over the 72t amounts.
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Old 02-10-2018, 02:15 PM   #8
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Good info, thank you. She has a couple of 401k's and wont be retiring from her current one either so moving them to a IRA might be very helpful.
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Old 02-10-2018, 03:21 PM   #9
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Thank you for the suggestion, I just read a article on that rule. Our problem is that we do not have a lot in our IRA's. So to take equal withdrawals based on our life expectancy would net us too small of a amount per year to make a difference.
If you rolled over your 401k and 457b money into a tIRA and then did a 72t would you have enough?
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Old 02-10-2018, 05:57 PM   #10
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If you rolled over your 401k and 457b money into a tIRA and then did a 72t would you have enough?
Well from what I understand about the 457b is I can draw on it anytime penalty free once I leave my employer. I can live off my pension alone but
I want to retire in about 4-5 years at 50, but the wife will be only 45. I have worked endless overtime, flipped cars and other stuff for extra money and have to a point gone without. The wife on the other hand does not want to work overtime and buys what she wants. I told her she can retire when she can support herself as far as what she wants to do. I will take care of all lodging, utilities, med prem,prop taxes and so on. I think she will need 1k a month to buy what she needs, half the food, half the entertainment, and whatever else she wants. Between her 401k and IRA's I think she can have close to $300k by 50 but will need to be able to access it for the rule of 4%.
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Old 02-11-2018, 07:21 AM   #11
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Thank you for the suggestion, I just read a article on that rule. Our problem is that we do not have a lot in our IRA's. So to take equal withdrawals based on our life expectancy would net us too small of a amount per year to make a difference.
Isn't the 72T rule "substantially equal payments?" Does it have to track life expectancy or can it be larger?
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Old 02-11-2018, 11:07 AM   #12
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Isn't the 72T rule "substantially equal payments?" Does it have to track life expectancy or can it be larger?
From the way i interpret it is life exp is the factor.
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Old 02-11-2018, 11:16 AM   #13
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From the way i interpret it is life exp is the factor.
You are right. I found an IRS FAQ that addresses it. They talk about three approaches that are all based on life expectancy.
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Old 02-11-2018, 11:17 AM   #14
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https://www.investopedia.com/terms/r/rule72t.asp
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