Consolidating ira accounts
Once she retires, she won’t need to access the money in her retirement accounts from age 40 to 45 but she’s going to need to withdraw ,000 of her money per year from the age of 45 through to when she turns 60.
She’s in the 25% tax bracket during her remaining 10 working years and will drop down to the 15% marginal tax bracket when she retires.
The first method for accessing tax-advantaged money early is the Roth IRA Conversion Ladder. I know people often try to explain these concepts on forums and elsewhere on the internet so here’s a direct link to this image, in case you want to share it: Another method I didn’t even consider until recently is to just pay the 10% early-withdrawal penalty and take money out of your retirement accounts whenever you need it.
Since I try to avoid penalties whenever possible, I never considered this as an option but Joshua Sheats from the Radical Personal Finance podcast brought this strategy to my attention recently.
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Since these accounts are for retirement (in the normal sense of the word), the penalty is the government’s way of discouraging you from spending the money early.
Everyone should utilize retirement accounts for standard-retirement-age spending but for people who think they’ll have more in their retirement accounts than they’d ever be able to use after they turn 60 and want to start accessing that money during early retirement, here are your options…student loan is subject to completion of a loan application/consumer credit agreement, verification of application information, credit qualification, and a benefit to borrower determination.We’re sorry, but we were unable to authorize your request.He then asked me to run some of my own numbers to see if I reached the same conclusion and I did.My analysis is described below and was a big part of the reason I decided to write this post.