2k6_TX_Dad
Dryer sheet aficionado
- Joined
- Dec 1, 2014
- Messages
- 32
Long time lurker, infrequent poster. I have a question for the collective experienced.
For about 20 years I've been working against a plan for early retirement. The plan has mostly been about maximizing pre-tax savings for my spouse and I (403b and 401k respectively) and paying down debt. The plan should net us close to $2M by the time I retire (in 4yrs and 11mo) which is a couple months after I turn 55. My wife will work for a couple more years to maximize her pension (which should cover only about 15% of retired budget income, but help immensely with health insurance).
My question relates to our current "lack of cash". Yes, we have an emergency fund and very little debt, but with our current spending and maxing out both pre-tax, there isn't much left to grow after tax. I'm concerned what I'll need to do if a 72-t isn't an option (if it's not offered by the plan, I need to get that question answered)
Should I take some tax "penalty" now to hedge against the 10% penalty before 59.5? Have you?
Alternatively, given the 2020 tax brackets gap of 10% is it better (if nothing in tax law changes ) to stay the current course? (Given we'll be in the 24% bracket with monies not saved pretax)
Thanks for taking the time to read, I appreciate all that I've learned here.
For about 20 years I've been working against a plan for early retirement. The plan has mostly been about maximizing pre-tax savings for my spouse and I (403b and 401k respectively) and paying down debt. The plan should net us close to $2M by the time I retire (in 4yrs and 11mo) which is a couple months after I turn 55. My wife will work for a couple more years to maximize her pension (which should cover only about 15% of retired budget income, but help immensely with health insurance).
My question relates to our current "lack of cash". Yes, we have an emergency fund and very little debt, but with our current spending and maxing out both pre-tax, there isn't much left to grow after tax. I'm concerned what I'll need to do if a 72-t isn't an option (if it's not offered by the plan, I need to get that question answered)
Should I take some tax "penalty" now to hedge against the 10% penalty before 59.5? Have you?
Alternatively, given the 2020 tax brackets gap of 10% is it better (if nothing in tax law changes ) to stay the current course? (Given we'll be in the 24% bracket with monies not saved pretax)
Tax rate | Married filing jointly or qualifying widow |
10% | $0 to $19,750 |
12% | $19,751 to $80,250 |
22% | $80,251 to $171,050 |
24% | $171,051 to $326,600 |
Thanks for taking the time to read, I appreciate all that I've learned here.