3 Ways to Retire Early (That You Might Not Know About)

These guys talking about rules you really don't need to do if you really understand what you are doing. So far behind in thinking. Fearing the tax man will keep you broke. By the time you get your money you'll be mad and broke.

72t and 54/55 make sense?

So happy I found these guys as a 6 month old

I did not know about the Roth 401(k) gains being taxed when using rule of 55 and 72(t)! Thanks for clarifying. Glad I found out now instead of at 55 😬

I must say I love dividend investing, getting those payments in for just holding a company is amazing. from what I've witnessed it all comes down to having a Licensed investment Adviser to handle your portfolio. All thanks to mine who has traded my savings daily from quarter a million to almost one million dollars in the last 9 months.❤✅

I did 3 Roth conversions but stopped because I live
In CA and earn well into 6 figures and don’t want to keep paying CA state income tax, especially since I won’t retire in CA.

Most people don’t ever have a seven figure 401k

You guys are getting closer to understand FIRE. Some comments.

Yes, many FIRE people have large after tax accounts. Yes, they will convert 401k to Roth when they have no earned income. No, they will not spend Roth before their after tax money. I mean come on.... These people are smart, that's how they made this money and setup their early retirement system in the first place.

There seems to be a lot of confusion about rule55 and whether 401K accounts "allow" it. Rule55 is an IRS rule, so it applies to all 401Ks. The question is whether your 401K allows partial distributions. Some 401Ks require a lump sum distribution. You could still do a rule55 withdrawal but you can only do it once. You'd have to roll the remainder of the account you don't want into an IRA, which you wouldn't be able to access.

With a good investment plan that ensures steady incomes without any doubts you can prepare for a well organized retirement. I started investing in stocks 3 years ago and so far, I am making a good yield on my portfolio built on top etfs, blue chip stocks and dividends as well. Managed by my FA who helped me grow to a 7 figure portfolio. I love passive income.. Credits to my FA Dianne Sarah Olson

I must have missed the answer Brian, what is the age that I turn 55?

Retirement becomes truly fulfilling when you possess two essential elements: ample financial resources and a meaningful purpose in life. Make prudent investment choices to secure good returns and ensure a comfortable retirement.

It's recommended to save at least 20% of your income in a 401k. You can use online calculators to estimate how much you should save based on your age and income. Saving at least 20% of your income in a 401(k) can help ensure that you have enough money to retire comfortably. By saving this much, you can take advantage of compound interest and potentially grow your retirement savings over time.

What if I’m trying to do this at 19?

In regards to the rule of 55, How is it tax advantaged if you pull it out during your working years, where you have to pay a higher tax rate? Opposed to leaving it in and taking it out when you have retired and are in a lower tax bracket.

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing with $150k and in the first 2 months, my portfolio was reading $274,800. Crazy right!, I decided to reinvest my profit and get more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

For the Roth conversion ladder, you can bridge the 5 years with after tax account and Roth contributions. Especially if you have access to mega backdoor Roth.

All the scammers in these comments... smh

I've kept much of my savings in cash for safety, but I'm unsure if it's right for retirement. Contemplating investing $400K in stocks, as I've heard investors can profit in tough times. Unsure about my next move.

Invest judiciously, keep a stop loss figure. Shuffle between debt and equity wherever the ratio goes too off your target. As for the target, I recommend a Ratio like this Debt % should be equal to your age in years. If you are 20, debt is 20%, reset in equity. If the market falls or rises drastically, your debt % will change, which you should rebalance to 20% and bring back equity to 80%. Thus you would have bought low or booked profit depending on if it was a crash or a bull run.

Do you have to be retired to take the 72t distributions? Or could you take these from an IRA while maxing out a 401k with your employer?

With a good investment plan that ensures steady incomes without any doubts you can prepare for a well organized retirement. I started investing in stocks 3 years ago and so far, I am making a good yield on my portfolio built on top etfs, blue chip stocks and dividends as well. Managed by my FA who helped me grow to a 7 figure portfolio. I love passive income.. Credits to my FA Dianne Sarah Olson

The guys ended the Roth conversion strategy discussion by saying that a negative was that you end up withdrawing Roth dollars and lose out on tax-free growth. That's not really what's happening. That money was locked away in a tax-deferred account. In this case the process of converting it to Roth is specifically with the purpose of withdrawing it. So, in essence you are withdrawing tax-deferred dollars. The method of doing that (and avoiding the early withdrawal penalty) happens to be through the Roth account.

I retired early 6 years ago. I intentionally maxed out my 401k and HSA instead of building after tax assets because I knew that I could do Roth conversions and get access to that money at lower tax rates. In my last full year of work I had a marginal tax rate of 25%. Last year my total effective tax rate was only 2.1%. And, most of that was the conversion.

I researched 72t when I retired early 6 years ago. I decided that Roth conversions can accomplish the same thing and are infinitely more flexible. This assumes you can bridge the first 5 years until the Roth conversions are accessible.

I love the nuance! I was just thinking last night, the answer to these types of questions are almost always "It Depends". I am building my after tax Bucket to prepare for an early retirement.

I'm part of the FINE movement. I save around 60% of my income, and want to retire when I'm at most 52. I can only do this because I basically live with my parents (who have a paid off home), and I have no kids and am single. If I ever decide to date again or have kids, I know it will most likely change. I've already calculated in how much I expect it will cost if I do, so I'd say I'm still good.

There is another way: move to another country. Conversions from USD to other currencies is often very powerful. My wife is from Kyrgyzstan, and I calculated out that with just the amount I had invested (which was a decent amount but far from $1M), we could retire in our 30s if we just moved to Kyrgyzstan due to the conversion rate. However, be careful when doing so as you need better healthcare as you grow older, and often these "cheap" countries have bad healthcare, so you may be causing major issues when you yourself have major issues. I just wanted to point this out as an option as I was expecting it to be one of the 3 ways as it is indeed a powerful option (with major issues, just like their 3).

I'm in my 60s and This is no time to taper retirement savings. I want to max out my retirement contributions and I also have another $500k in a savings account that i want to invest in a non-retirement account. Where should I invest it now?

I would love for Brian to do a podcast on financial strategies and rules/regs with regards to retirement accounts when planning for long term care of a special needs child. It seems so complicated.

I've kept much of my savings in cash for safety, but I'm unsure if it's right for retirement. Contemplating investing $400K in stocks, as I've heard investors can profit in tough times. Unsure about my next move.

Hypothetical here. If I convert on 12/31/24, does the 5 year clock start on 12/31 or in 2024 generally. Would I need to wait until the exact date 5 year later, or could I redeem at an earlier date in the 5th year?

Investments are the roots of financial security; the deeper they grow, the stronger your future will be."

In 2023, my employer terminated me after 20 years of employment, 2 months before my 55th birthday which was in 2024. So I didn't get to tap my 403(b) early. The good thing is this motivated me to find another job which I was able to do at the end of 2023. I inherited an IRA in 2023 and was told I could withdraw from that with no penalty but pay ordinary taxes.

Does the FOO assume we own a home already? Where would that fit in? I still rent but i want to own a home. Im saving about 50% of my income but not sure where retirement fits in to that if i want a home sooner than later.

You have some fantastic content on your channel. At 53 years old, my wife and I achieved a net worth of $1 million back in 2017. Fast forward five years, and it has grown to $2.4 million. Despite our combined annual salary of just over $100,000, we have adopted a frugal lifestyle. We continue to drive older cars, prepare meals at home, and make use of leftovers. Additionally, we have two children currently in college. Fortunately, we had saved for their college expenses, and they are contributing by working part-time. As a result, they will graduate without any student debt.

As a soon retiree, keeping my 401k on course is my top priority. I have been reading of investors making up to 250k ROI in this current crashing market, any recommendations to scale up my ROI before retirement will be highly appreciated.

Thanks.

Excellent content here today guys.

I’m 47 and want to retire at 55-57. Using Roth Conversion at 50 when I’m in the highest tax bracket I’ve ever been in. Making these conversations doesn’t make sense. I’m paying off all debt (car and home) by then, so my expenses will be 60% of my current expenses. I don’t have a Roth account, so I’m building up a brokerage portfolio to bridge the gap between 55 and 59.5. Does this make sense or should I not worry about a bridge account because I’ll be able to just pull from my 401k at 55. I’ve also heard that it might just make sense to pull from 401k and take the 10% penalty instead of doing some complicated math that could screw me over like a 72t.

Rule of 55 and being born in January sucks :,(

Hi guys if you could make the videos shorter would be great! Thank you.

I quit my job at age 55 and I used the rule of 55. After one year, I went back to work part time at the same company. I still have my 401k account. If I leave my company again, am I eligible to use the rule of 55?

Does rule of 55 apply to SEP IRAs?

If i have a roth 401k can i just roll it over to my roth ira without doing that conversion and still move my money to the roth account?

I can't wait to be 55 at the age of 55. Thanks for the tip, Brian! :D

Our 401(k) plans allow in-plan Roth conversions, but not traditional 401(k) to Roth IRA conversions. The money can’t be moved out of the 401(k) until after 591/2, while still at the company.

if the idea is to build an income stream to use as complement for retirement, or at any given point if needed, then building a dividend growth portfolio always buying adding to it could be a good and peaceful path. On the long run consistency and perseverance could guaranty the desired income stream goal with little worries

I asked my 401k provider about the rule of 55. They said it is determined by the IRS not the provider and they had no other input to offer.

I have learned that I can not do Roth conversions from a current employer 401k plan. Is that your experience?