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|Subject: Retiring before 59 1/2||Date: 10/9/1997 11:29 PM|
|Author: TSnively||Number: 443 of 81375|
I asked before about taking money out of a tax-deferred account before age 59 1/2, and Pixy and others told me about the roughly equal annual payments for the larger of 5 years or until over 59 1/2 rule. (Nice sentence, huh?)
I still have a ways off. I'm 26. I've started UV2, and will probably start UG5 soon. If I make roughly my current salary (even without inflation adjusting), if I contribute 10%, if I go 50-50 UV2 and UG5, get a couple of percent *less* than historical results average per year, if I take out $40,000 in a couple of years from now for a house down payment, and if I adjust retirement needs with inflation at 4.5% per year, then I should be able to retire at 45! Doesn't it sound easy? :-)
The plan that worked out that way was: Most of my money is currently tax deferred. If I kept that all in UV2, tax deferred, and never contribute again to it, it would be enough to live on by age 59 1/2.
The rest would be in a taxable account, UG5, and I subtracted 28% annually for capital gains. No margin needed, but all of my contributions go here. By age 45, this should be large enough to sustain me until I get to 59 1/2.
So, without dealing with early withdrawals, I can retire at 59 1/2.
However, I know that UG5 would be better tax deferred, and UV2, especially 18-month holding, would be better taxable (and could do better with margin and with Unemotional Margin). I could then continue to contribute and do better on my taxes each year.
So, if I did that, the tax deferred account would get bigger faster. By age 45 (or possibly earlier), I might be able to retire. However, I'd have to start the early withdrawal stuff. But if the calculations use life expectancy, the portions may not be enough to live on each year.
[I understand that tax laws can change a lot in 30 years. Let's just suppose the laws didn't change every year. :-)]
[I don't know if I'd be eligible for Roth IRA, and I will check it out, but for early withdrawal it still has the same 59 1/2 issue.]
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