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Hello fellow fools,
I am un able to find good advice concerning using the 401K effectivly during a forced early retirement at 53 years of age. So I came up with a plan that is working well for the past 4 years and would like to share with others in the same situation.
My situation is just the wife and I and 8 grand kids that grandma can't stop spoiling, and all credit cards are gone. It is a pay as I go or we do not get it plan.

I must be a king of fools as I do not follow the mainstream advice of having only 10% of savings in the stock market when you actually retire. And the rest in CDs or bonds or all the other SAFE havens in the savings world. However we must be educated enough to be relaxed in retirement, not stressed out!

1
Pay off all credit cards, but do not bust the bank by cashing out ALL your stock holdings.
Stay invested in stocks as though your still working, because you are, only now your career has changed to being a broker.

2
Total up all your known bills for a year along with your best guess for variable bills, and place this amount into funds and other easy access saving tools.
You will be drawing from this account to pay bills and have a little fun. The amount left in stocks is your FUTURE income, a pay raise sort of. The more left in stocks the better.

3
Do not let the 10% penalty for early withdrawl scare you as you will make that, plus more back in the stocks. I say this on the basis that we may not have a choice of loosing the home or loosing just 10%. I choose the later.

4
Long term is the only term. Some say 5 years, unfortunatly we may have to make it only 1 year. That can be minimized by simply not selling all of the stocks of a single company to fund your yearly needs budget. Spread it across the board, but watch out for the XDIV dates, do not cheat yourself of by not collecting the dividend.

In summary my bills are paid, I am able to live off the profits and dividends, have fun mini vacations, and I did not have to loose my home. No I am not a millionair, just a working fool that was forced to retire was too soon.
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