Explore An Early Retirement With The Rule of 55, SEPP, and more!

Рет қаралды 5,432

Күн бұрын

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This video discusses the Rule of 55 and 72(t) distributions, providing insights on common mistakes related to early withdrawals from retirement accounts.
It aims to educate viewers on how to avoid these pitfalls and confidently retire early.
So watch till the end to avoid these early withdrawal mistakes that can ruin your early retirement!
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Time Stamp
00:00 Intro
02:12 Reviewing the Comments of the Week
06:00 What Is the Rule of 55
09:40 Explanation of Rule 55 With a Real-Life Example
12:53 Pro Tip
13:44 What Is Tax Gain Harvesting
14:58 When to Use Rule of 55
15:26 Brokerage Account
16:37 What Rule 72(T)
17:34 Steps to Determine Social Security
20:40 Substantially Equal Periodic Payment
23:15 Summary/ Conclusion
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Early Retirement Expense Calculator (FREE) → rootfinancialpartners.com/cas...
PODCAST - earlyretirementpodcast.com/
INSTAGRAM - / earlyretirementari
LINKEDIN - / aritaublieb
What video topic would you like to see discussed in a future video?
Ari Taublieb, CFP®, MBA, is the Vice President of Root Financial Partners (Fiduciary) and host of the Early Retirement Podcast.
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⚠️ "DISCLAIMER:⚠️
All content is not to be received as financial advice, and each individual should consult with their dedicated financial planner, tax preparer, estate attorney, etc., before making any financial decisions.
This video contains content I created and got permission from its creators to use. This Channel DOES NOT Promote or encourage Any illegal activities; all contents provided by This Channel are meant for EDUCATIONAL AND ENTERTAINMENT purposes only.

Пікірлер: 45

@jnewby74 2 ай бұрын

Personally I like the stories. I just figured if someone doesn’t they can just fast forward or use the chapters to get right to the content. Everyone gets what they want!

@earlyretirementari 2 ай бұрын

Pleased to hear it!

@MidlifeCrisisManagement 2 ай бұрын

more and more of my colleagues are retiring early via the Rule of 55 on their 401k because they've paid down their expenses - no mortgage, no car loans, no credit card debt, and their kids are independent. poor on paper, staying within the 12% tax bracket, using HSAs to help pay their health care costs, and maybe even getting an ACA subsidy. some of these folks who have to keep working, etc... are their expenses totally out of whack or what? thanks for this content, Ari. keep 'em coming!

@earlyretirementari 2 ай бұрын

Thank you!!

@Jl-620 2 ай бұрын

Great video Ari! Important to note that, to use the rule of 55, one should check if their 401k plan allows for partial distributions after separating from the company. Many plans don’t allow it and only allow for a total distribution (or total rollover) or to keep it in the plan, which negates the ability of using the rule of 55 (which only says you would not have a 10% penalty IN THE EVENT THAT YOU COULD take a distribution).

@earlyretirementari 2 ай бұрын

Yes!!

@jocelyncole5263 2 ай бұрын

Ari, thank you so much, I stumbled on your channel two weeks ago and have watched more than 10 episode already. Everything you covered is very educational and I love the story and the different scenario. Please keep doing what you’re doing.

@earlyretirementari 2 ай бұрын

Thank you so much for this comment! So glad

@markb8515 2 ай бұрын

Thanks Ari for another very informative video! I always enjoy your stories and humor so keep on doing it.

@earlyretirementari 2 ай бұрын

You’re so welcome!!

@johnkumpelis1121 2 ай бұрын

Excellent Ari! Great vid, good concise info. It seems to me with 100,000 income need there's plenty of room in the 22% tax bracket for roth conversions.

@earlyretirementari 2 ай бұрын

Glad it was helpful!

@michaeldoherty7560 2 ай бұрын

(Long message incoming) Ironically I often fall asleep listening to your videos at night as a replacement to scrolling less educational content on tiktok/instagram etc. Just listened again (writing this in the morning as I realized I didn’t get to listen to the whole thing)😂 I wonder what % of your demographic is unmarried, younger men. Love the stories about “John” and “Sue” who are 52, 55, 60+, etc, and definitely still learn from them, but wonder if you have any stories to share about 35, 40, or 45 yr old early retirees. I was having a convo with a friend about how we might be the most financially literate generation (access to free educational content is everywhere) but temptations (meme stocks, crypto, gambling, etc) has never been higher. What do you think? All the best Ari

@emox6400 2 ай бұрын

I’ve been listening to SO many money, wealth, and retirement podcasts for a year now and they never seem applicable to us! We have a high NW and want to retire at 53. Trying to figure out tax issues, healthcare costs, withdrawal approaches, etc. Your podcast is perfect! Though I do get confused sometimes when you go to fast explaining one thing, then spend too long (going on a tangent) on the next. But I just google if I don’t understand something!

@earlyretirementari 2 ай бұрын

Thank you for your feedback! I don’t take it lightly

@kaytee1617 2 ай бұрын

Thank you for addressing a question I’ve had about continuing to max 401k, catch-up, HSA and Roth or put some in a brokerage account. Great content.

@earlyretirementari 2 ай бұрын

You’re so welcome!!

@jameschaves5723 2 ай бұрын

Thanks Ari. I’ve started to shift that savings from 401K to brokerage.

@earlyretirementari 2 ай бұрын

Glad it helped :)

@mims2582 Ай бұрын

If you are 50 and don’t know when you’ll retire but know it’s imminent, would it still be best to feed into a 401k and trigger t72 later….because feeding into 401k ensures you’re not paying tax yet and if you have To retire you can plan your t72 distribution to be at low tax bracket until age 59.5?

@eddieloujones2673 Ай бұрын

I can see why ACA is more expensive for someone with w2 income but it seems unfair to penalize someone with income from a 401k. Aca and Irmaa are both hidden taxes that penalize savers. So yes your federal/state tax rate may be lower in retirement but be sure to add on the hidden tax. It may tilt the game in favor of a Roth. Especially if you are single and have a ridiculously low upper bound where healthcare becomes a lot more expensive.

@DallinBunnell 2 ай бұрын

Can you do a 72t from an annuity? Say you have a lifetime income rider, can you turn that on before 59.5 from an annuity and not get hit with penalties?

@robertkelly6189 2 ай бұрын

I don't quite understand why have to pick between Rule of 55 OR cool tax planning. I intend to do both.

@earlyretirementari 2 ай бұрын

You can do both!!

@johnsg8 2 ай бұрын

Thanks for all the great content! If I change jobs before before I'm 55 and transfer my old 401k into my new one, does the Rule of 55 apply to all of the funds?

@earlyretirementari 2 ай бұрын

You’re welcome. No, moving your 401k to a new employer's plan won't allow you to use the rule of 55 with that money. The rule of 55 applies to distributions from your current employer's 401k plan if you separate from service (leave the job) in or after the year you turn 55. Moving your 401k to a new employer makes it a rollover contribution into a different plan, and it wouldn't be considered funds from your current employer's plan anymore.

@gbski43 2 ай бұрын

Great question and thanks for answering Ari

@richardkatie25 2 ай бұрын

What if a large portion of your 401K is in roth at the age of 55? Couldn't you just draw from your pre-tax Funds up to the tax bracket you're comfortable with and then make up the difference from the roth funds? I understand why the brokerage account is so valuable before 55, but after 55 I think this would be optimal right?

@earlyretirementari 2 ай бұрын

Not all (most don’t) have significant Roth - but that’s great for you!!

@gracewang9478 2 ай бұрын

Very interesting content, would like to hear what you have to say about my financial situation . How can I get connect with you

@earlyretirementari 2 ай бұрын

I'm glad! You can do so here: vwo3759x8i7.typeform.com/earlyretirement?typeform-source=www.buzzsprout.com

@trobop1 2 ай бұрын

Can you do visuals with actual numbers?

@earlyretirementari 2 ай бұрын

I do make case study videos where I go over a real-life case study of my clients; they're packed with numbers and scenarios.

@colbyharder4733 2 ай бұрын

If you withdraw money from a Roth 401K using the Rule of 55, it won't increase your taxable income, right?

@mbmatt100 2 ай бұрын

Careful. I think the rule of 55 only keeps you from the 10% penalty. The rules for a tax free Roth are still 59.5. So I believe you’ll have to pay income tax on it.

@mbmatt100 2 ай бұрын

What’s all required to start a 72t. Do you have to apply for it? Or do you just file a form 5329 with your taxes every year. Thanks

@colbyharder4733 2 ай бұрын

@@mbmatt100I did a bit of research and it sounds like the Roth contributions are still tax free, but the Roth earnings would be subject to income tax.

@mbmatt100 2 ай бұрын

@@colbyharder4733 yes. I agree, the contribution would be tax free. Only the earnings would be taxed if before 59.5. I didn’t consider you were only talking about taking out the contributions. Good call out.

@MidlifeCrisisManagement 2 ай бұрын

five-year rule applies to the Roth 401k funds. Congress fixed the other problem with Secure 2.0

@sixstringsdaddy2477 2 ай бұрын

Like most videos and articles about the rule of 55, you skip over the pointing out that some 401(k) plans will NOT let you take distributions under the rule of 55. You mention "most" plans do when it would be a better video to point out that some don't and you can't take it for granted.

@earlyretirementari 2 ай бұрын

Great point and every plan is different