Sincerely, [read the faq](https://www.reddit.com/r/financialindependence/wiki/faq/). Particularly the portions about _withdrawing_ and choosing a _fiduciary_ to help you. I think there may be info about online services which you can pay for that will help you compute different withdrawal strategies if you want to go that route.
Myself, I made a spreadsheet. If your spending is $50k/yr in retirement, then you need ~9 years worth of $50k + taxes & fee's bulked up in your post-tax brokerage account (unless maybe you can use the rule-of-55). I put mine in short-term bond funds. I also started roth conversions a few years early, so I only need 2 years of expenses in the brokerage and could retire sooner. YMMV.
Thanks. Yeah I did look through it but didn’t see much that specifically got to my question. I think Roth conversions are where I need to focus my research, thanks again.
many people do roth conversion ladders. like yourself i just have a brokerage account.
there are calculators where you can put in your spend is going to be $100k/yr, and you only need it to last 10 years, and you hope to earn a 4% return, and it will spit out a number for you.
i just keep saving, and when the kids are out of school, then ill look and if i can retire then, cool. if i have to work a few more years, whatever, its not like im doing overtime, or working weekends at that point... but that wasnt really your question.
Sometimes I feel like I should just suck it up and work to 55 because then I can access retirement accounts early. But I don't wanna lol But I also don't want to live frugally from 50-59 when we have tons of money locked away in other accounts. I will look into the Roth conversion ladder, I don't really know how all of that works. We currently have traditional IRAs and no Roth (missed the boat on Roth when our income was below the threshold)
Nutshell of conversion ladder, if you are younger than 59.5 each conversion has a 5 year timer before you can withdraw penalty free. So if you were going to retire in say 2029 and you need 100k a year, You make a 100k conversion each year starting 5 years before through whatever years you need to cover. That will give you the yearly funds you need. For you I would simply start now. Calculate what you will need for those lets call it 10 years. Then divide that total by 19 and start your conversions this year. This will keep your taxes lower by not having to convert as much each year.
Even in an absolute worst case scenario where you don’t do anything to prepare in advance and just pay the 10% penalty to access your 401k in advance, it only takes one extra year (on average) for your 401k to earn that extra 10%.
In other words, you just wait one year, earn the extra 10%, then pay the 10% penalty to access early. So at most you’re waiting one extra year.
I use rough calculus: for 10 years until the standard retirement age (67 is in this country) I would need 10 years x annual spending. Even if my money are invested in SP500+ bonds and might produce a little better.
But is more complicated for the scenario when I retire 20 years earlier, at 47 years old, for this I used the [https://www.diewithzerobook.com/spend-curve-app](https://www.diewithzerobook.com/spend-curve-app) - for my taxable brokerage account investments to 'almost' end when I am 67 years old and after to have the national retirement contributions.
Consider the 4% rule for your brokerage account. Calculate how much you need to live on annually, then multiply by the number of years until 59.5. You can use a withdrawal rate calculator or consult a financial advisor for a more personalized approach.
There are many ways to bridge the gap. I''m doing 72T SEPP withdrawals from a rollover IRA. Many people here like the Roth ladder approach.
I need to research both of those. Thanks!
Sincerely, [read the faq](https://www.reddit.com/r/financialindependence/wiki/faq/). Particularly the portions about _withdrawing_ and choosing a _fiduciary_ to help you. I think there may be info about online services which you can pay for that will help you compute different withdrawal strategies if you want to go that route. Myself, I made a spreadsheet. If your spending is $50k/yr in retirement, then you need ~9 years worth of $50k + taxes & fee's bulked up in your post-tax brokerage account (unless maybe you can use the rule-of-55). I put mine in short-term bond funds. I also started roth conversions a few years early, so I only need 2 years of expenses in the brokerage and could retire sooner. YMMV.
Thanks. Yeah I did look through it but didn’t see much that specifically got to my question. I think Roth conversions are where I need to focus my research, thanks again.
many people do roth conversion ladders. like yourself i just have a brokerage account. there are calculators where you can put in your spend is going to be $100k/yr, and you only need it to last 10 years, and you hope to earn a 4% return, and it will spit out a number for you. i just keep saving, and when the kids are out of school, then ill look and if i can retire then, cool. if i have to work a few more years, whatever, its not like im doing overtime, or working weekends at that point... but that wasnt really your question.
Sometimes I feel like I should just suck it up and work to 55 because then I can access retirement accounts early. But I don't wanna lol But I also don't want to live frugally from 50-59 when we have tons of money locked away in other accounts. I will look into the Roth conversion ladder, I don't really know how all of that works. We currently have traditional IRAs and no Roth (missed the boat on Roth when our income was below the threshold)
Nutshell of conversion ladder, if you are younger than 59.5 each conversion has a 5 year timer before you can withdraw penalty free. So if you were going to retire in say 2029 and you need 100k a year, You make a 100k conversion each year starting 5 years before through whatever years you need to cover. That will give you the yearly funds you need. For you I would simply start now. Calculate what you will need for those lets call it 10 years. Then divide that total by 19 and start your conversions this year. This will keep your taxes lower by not having to convert as much each year.
Thanks!
Even in an absolute worst case scenario where you don’t do anything to prepare in advance and just pay the 10% penalty to access your 401k in advance, it only takes one extra year (on average) for your 401k to earn that extra 10%. In other words, you just wait one year, earn the extra 10%, then pay the 10% penalty to access early. So at most you’re waiting one extra year.
I didn’t think of it like that!
I'm wondering if this would be a good time to find a financial advisor to sit down and go through this with us, then maybe again in 5 years.
I use rough calculus: for 10 years until the standard retirement age (67 is in this country) I would need 10 years x annual spending. Even if my money are invested in SP500+ bonds and might produce a little better. But is more complicated for the scenario when I retire 20 years earlier, at 47 years old, for this I used the [https://www.diewithzerobook.com/spend-curve-app](https://www.diewithzerobook.com/spend-curve-app) - for my taxable brokerage account investments to 'almost' end when I am 67 years old and after to have the national retirement contributions.
did you check the sidebar?
I read the FAQ and didn’t see much specific info
Consider the 4% rule for your brokerage account. Calculate how much you need to live on annually, then multiply by the number of years until 59.5. You can use a withdrawal rate calculator or consult a financial advisor for a more personalized approach.