IRS Rule of 55 is our ticket to ride! Also, below a certain taxable income threshold the long term cap gains are taxed at $0, I think last year that threshold for MFJ filers was $89250.
This year is definitely going to be worse. I made bad decisions with investing last year and lost a truckload of money I wouldn’t have lost that much if I didn’t keep worrying about my portfolio, I was stuck on deciding if to continue investing or start paying for a house. I ended up selling my positions and the home turned out to be a fixer upper more than I imagined. I don’t know how long I can keep this up for.
If 2022 has taught us anything, it’s that good times don’t always last. When things are looking up, we should direct more energy into planning for the worst-case scenario instead of waiting until the storm clouds roll in.
I was tempted to sell just like you having lost a lot, which is over 50% of my portfolio I am seeking more effective investment approaches to scale up with in these times as I have read of investors making gains in a bear market. Index funds don’t just cut it. I'm curious if this possible for the average retail investor?
One thing I notice does not get mentioned with early retirement is the likelihood of an inheritance. Both from a planning standpoint and a recipient's standpoint. Since that has affected our early retirement decisions, I thought it was worth a mention. Glad to give more details in a less public venue, but you likely understand.
Yes! I’ll do a video addressing how to plan for it. It’s likely for most, and there are specific strategies plan around it. Too many people ignore it entirely and many also rely on it. There’s a balance necessary. Don’t retire due to inheritance and don’t die with millions. I’ll explain how.
Ability to use "rule of 55" also depends on the terms of your employer's 401(k). The employer I just left does not allow partial withdrawals from a 401(k). In other words, sure, you might can withdraw without penalty because of "rule of 55", but you if you do you must withdraw your entire balance (and pay all the taxes on that). Nope!
Yes, I have been researching 72(t) especially vs. traditional Roth ladder conversion approach (reinvesting vs. spending). Curious, can a former employer prevent you from using 72(t) like they could with rule of 55? (To be clear, my company allows Ro55, but requires a complete and total distribution of entire account which is undesirable and is effectively the same as not allowing)
It can be a great option. I don’t execute it often as I prefer to fund a brokerage account to keep income low and do tax gain harvesting or roth conversions by massaging income in combination with comparing the benefits to healthcare subsidy management. Rule 72(T) is absolutely a great option for those that need it and I have another episode coming out on it more detail shortly. I appreciate your comment.
@@earlyretirementarion the 72t is there a form that you fill out before starting or is it that you take out your sepp every year and it’s noted on your taxes as it 72t? Thanks.
@@earlyretirementari it's not an all or nothing scenario as it can be part of the overall plan to manage taxable income. For example, a 53 year old with a 70K Ira can get an extra 10K per year penalty free. You definitely should have mentioned this in the video.
feels lowkey kinda hilarious that youtube wants kids to plan for early retirement. great channel, love the content! as a 3 year old I love IRAs and my 401k
Hey Ari , really nice video ! I was wondering if I could help you with Best Quality Editing in your videos which visually appeal to audience and would increase average view duration and will also make a highly engaging Thumbnail which will overall help your videos to reach to a wider audience ? Pls let me know what do you think ?
The info about your parents and why you became an advisor helps give it a personal touch. Keep it real!
Very helpful video ...
But the inflation is making it harder to save now
Any advice ?
Thanks Ari for another helpful video!
enjoy the content and the podcast, keep 'em coming
Great Content. Ari you are a master at early retirement
We successfully cleared our entire Mortgage of $489,000 in 5 months with the help of Stefan Kunzs.
IRS Rule of 55 is our ticket to ride! Also, below a certain taxable income threshold the long term cap gains are taxed at $0, I think last year that threshold for MFJ filers was $89250.
I went from $200,000 in debt to $80,000 net profits in 2 months with the help of Stefan Kunz.
Good advice!
I went from $200,000 in debt to $80,000 net profits in 2 months with the help of Stefan Kunz.
This year is definitely going to be worse. I made bad decisions with investing last year and lost a truckload of money I wouldn’t have lost that much if I didn’t keep worrying about my portfolio, I was stuck on deciding if to continue investing or start paying for a house. I ended up selling my positions and the home turned out to be a fixer upper more than I imagined. I don’t know how long I can keep this up for.
We all made mistakes, ride it out, we just need to keep our heads up...
If 2022 has taught us anything, it’s that good times don’t always last. When things are looking up, we should direct more energy into planning for the worst-case scenario instead of waiting until the storm clouds roll in.
It is already too late for that kinda suggestion don’t you think?
@BillJohn-fi4dx No it is not, one should consider more about where the economy will be tomorrow instead of where it is today
I was tempted to sell just like you having lost a lot, which is over 50% of my portfolio I am seeking more effective investment approaches to scale up with in these times as I have read of investors making gains in a bear market. Index funds don’t just cut it. I'm curious if this possible for the average retail investor?
One thing I notice does not get mentioned with early retirement is the likelihood of an inheritance. Both from a planning standpoint and a recipient's standpoint. Since that has affected our early retirement decisions, I thought it was worth a mention. Glad to give more details in a less public venue, but you likely understand.
Yes! I’ll do a video addressing how to plan for it. It’s likely for most, and there are specific strategies plan around it. Too many people ignore it entirely and many also rely on it. There’s a balance necessary. Don’t retire due to inheritance and don’t die with millions. I’ll explain how.
Good stuff Ari
Ability to use "rule of 55" also depends on the terms of your employer's 401(k). The employer I just left does not allow partial withdrawals from a 401(k). In other words, sure, you might can withdraw without penalty because of "rule of 55", but you if you do you must withdraw your entire balance (and pay all the taxes on that). Nope!
I went from $200,000 in debt to $80,000 net profits in 2 months with the help of Stefan Kunz.
Why is there almost no mention of 72t SEPP withdrawals to avoid the 10% penalty?
Yes, this is concerning.
Yes, I have been researching 72(t) especially vs. traditional Roth ladder conversion approach (reinvesting vs. spending). Curious, can a former employer prevent you from using 72(t) like they could with rule of 55? (To be clear, my company allows Ro55, but requires a complete and total distribution of entire account which is undesirable and is effectively the same as not allowing)
It can be a great option. I don’t execute it often as I prefer to fund a brokerage account to keep income low and do tax gain harvesting or roth conversions by massaging income in combination with comparing the benefits to healthcare subsidy management.
Rule 72(T) is absolutely a great option for those that need it and I have another episode coming out on it more detail shortly.
I appreciate your comment.
@@earlyretirementarion the 72t is there a form that you fill out before starting or is it that you take out your sepp every year and it’s noted on your taxes as it 72t? Thanks.
@@earlyretirementari it's not an all or nothing scenario as it can be part of the overall plan to manage taxable income. For example, a 53 year old with a 70K Ira can get an extra 10K per year penalty free. You definitely should have mentioned this in the video.
I can't turn on notifications for your channel because it says "this action is turned off for content made for kids"???
I’ll fix that!
feels lowkey kinda hilarious that youtube wants kids to plan for early retirement. great channel, love the content! as a 3 year old I love IRAs and my 401k
Glad to see Ari's content is approved for kids 'cause my 10mo grandson & I listen to his podcasts- very calming for mid afternoon naps😂
Ari, does Root's retirement planning academy software cover California state tax? And the software will be updated annually?
Good question!
Does the rule of 55 apply to a Roth 401k?
Hey Ari , really nice video ! I was wondering if I could help you with Best Quality Editing in your videos which visually appeal to audience and would increase average view duration and will also make a highly engaging Thumbnail which will overall help your videos to reach to a wider audience ? Pls let me know what do you think ?
Ari, love your posts but this was so chatty I couldn’t get the 5 points without dosing off
Thank you for letting me know
I don't agree. I was so engaged the end surprised me.