Next post: Am I being too cheap? Should you invest how should i invest my ira 401k and Roth IRA if you plan to retire early?
It’s only January, but I’m dreading tax day already. Our taxes will be quite complicated this year because I sold a bunch of stock options and the rentals will muck things up as well. R Block and I’ll fill it in as the required W-2 documents arrive. I really hope we won’t have to send the IRS a big check this year. Taxes take a huge bite out of your income and nobody likes to pay them.
AGI and pay fewer taxes now. Here are my reasons for investing so heavily in the tax advantaged retirement accounts. This psychological barrier will prevent us from touching our retirement fund until we really need it. If the funds are in a regular taxable brokerage account, it will be too easy to withdraw and spend it. Let it ride After 16 years of work, I accumulated a nice sum in my retirement accounts. The sum isn’t enough to retire on at this time, but it should keep increasing if I let it ride in the stock market for 20 more years. My strategy is to make the finances work without touching this retirement fund until I’m 60.
In 20 years, my retirement portfolio should be able to support a comfortable retirement. Phased retirement Most people work very hard until they are near retirement age and then jump straight into it. My retirement strategy is a bit different. I worked hard at a corporate job until I turned 39, then I retired from that career. The 40-60 phase of my life is wide open. I am a stay at home dad now and I’m building my online business. The retirement portfolio is still accessible There are some ways to access the fund without having to pay the penalty.
First of all, the contribution portion of the Roth IRA can be withdrawn at anytime without a penalty. We might resort to this if Mrs. Fortunately, we also have investments in our taxable accounts. Each of these investments generates a small income.
Along with my online income and Mrs. RB40’s paycheck, we can live a comfortable lifestyle right now. Do you plan to retire early? Roth IRA is a good idea?
The following two tabs change content below. Joe started Retire by 40 in 2010 to figure out how to retire early. He spent 16 years working in computer design and enjoyed the technical work immensely. However, he hated the corporate BS. At Retire by 40, Joe focuses on financial independence, early retirement, investing, saving, and passive income.