FIRE with tax deferred accounts

[uksho]

So, is it different if bulk of your retirement money is in tax deferred from FIRE perspective? For example , if you have 35 x your annual expenses, do you add 10% for penalty .

can you only take out 50k from your account every year with penalty or you have to take out all at the same time

P.S: I have no plans to retire nor I am close to 35x , but would like to cut down the disability and life insurance premiums when I reach there

thank you

[Lordosis]

There are lots of ways to get the money out penalty free. Don't quote me but I think disability is one of them. There are a couple blog posts on it.

[Nysoz]

I call dibs on a 1% fee for a Nancy Kerrigan “accident”

[JBME]

look up roth conversion ladder and SEPP. you can avoid the 10% penalty with planning

[MaxPower]

In addition to what has been mentioned above, I would guess the odds of someone/anyone on this board retiring early without substantial taxable account monies is close to zero, so those accounts are usually used to bridge to when they can start taking money out of tax deferred accounts penalty-free without having to go the SEPP route.

Another way, and one I’m planning to use, is a 457 account. That will be the first money I use at (hopeful) early retirement. I’ll take whatever I have in there and figure out how many years I have until I’ll need to use either tax deferred monies or SS, and withdraw that much each year, which will hopefully allow me to leave my Roth and taxable and tax deferred accounts untouched.

[G]

I dropped disability policies/riders as I reached goals: Lean FI, debt-free, FI. Yeah, you can use 401k without penalty if you are disabled. You can use IRA for health insurance premiums without penalty.

As Max points out, pre-tax accounts are only one piece of the NW puzzle.

[PhysicianOnFIRE]

There's no "$50k max withdrawal or penalty" type of rule.

These should help your understanding.

• Six and a Half Ways to Bridge the Early Retirement Gap to Age 59 and a Half

• How to Get to Your Money Before Age 59 1/2

[uksho]

Thanks all. Good to know .