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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75537  
Subject: Re: Questions about early retirement Date: 4/19/2007 2:40 PM
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3. Am I missing an investment vehicle that I should be considering?


I did see this mentioned in the thread, but it seemed to get glossed over, so I thought I'd repeat it. I think you're missing saving in a taxable account. I don't happen to believe that maxing out available retirement vehicles is sufficient to fund retirement, particularly if you want to be retiring early. I also like the fact that there are no limits or constraints on saving in a taxable account, so I can invest the dollars however I want, and I can access them whenever I want for any reason.

I notice that when people think about retirement, there's a tendency to only think about 401k's and IRA's as though if the money is not in a 'retirement account' then it cannot be used for retirement, and I think that gives short shrift to taxable accounts.

Having said that, I notice that for my own saving, the vast majority of it is in taxable accounts, and that's good because we plan to retire in about 6-8 years when I'll be around 55-57 years old, so that's still before I can access my retirement accounts unless I want to do the 72t type of thing.

Coincidentally, we went to one of those retirement dinner/seminar things last night, and I noticed the same thing where the people giving the seminar made 2 assumptions that are wrong in our particular case. They were assuming that the bulk of their clients' net worth was in house equity [I assume by this that these folks may be targetting the lower end of the market] and that the bulk of savings are in retirement accounts.

It seems to me, though, that the best way to accumulate money is to save in a taxable account where there are no limits on what I can save, though I do admit that I max out our retirement savings as well. It's just that we tend to have more that goes into regular savings.

So that's something I think you've missed and to which I think you should give some thought.

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