Retiring Early? Don’t Forget About 72(t)!

72t distribution rules

72 is a very good number

Ask any financial advisor about 72t and I’ll bet you’ll see them cringe.

It’s not a popular planning method, mostly because it comes with lengthy restrictions that, if violated, can you lead to severe penalties.

Clients don’t like paying penalties.   Advisors don’t like when their clients pay penalties.   72(t) has the potential, if done wrong, for the clients to pay a huge chunk of penalties.   See why we cringe about 72(t)?

Some of you may have no clue what 72(t) is.   If you are not planning on retiring early (before the age of 60), then skip this post and come back another day.  :)

If you are in the financial position to retire early, and have a bulk of your assets in retirement accounts, then 72(t) may be of help to you. Let’s take a look at the 72(t) early distribution rules.
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When Can You Retire?

Have you ever wondered exactly when you’ll be able to retire? The answer to that question is no different than the answer to many questions in personal finance—it depends. There’s no right or wrong amount that you must have in your 401(k) or IRA. Nor is there a strict rule that says you have to stop working at age 65.

When Should You Retire?

I’ll offer a theoretical answer to when you should retire. If “retirement” means entering a phase of life where you stop earning income, then you can retire as soon as you have enough passive income ideas or assets to support the lifestyle you want for as long as you’re alive.
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How to Determine Your Income Needs For Retirement Planning

Are you wondering about how much you’re going to need saved for when you retire?

It’s a common question that a lot of people have, young and old. Some of the more common variations that I get on this question are, What is the amount of income that I’m going to need in retirement? or, How do I figure out what my retirement income needs are going to be?

It’s a tough question, but the toughest part about answering it is that there is no clear cut answer.  There is no universal formula, some general mathematical rule of thumb,  or some magic number that you need.

Your retirement income needed all depends on your unique situation.

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Is a 401k Enough For Retirement?

Transcription follows below:

Hey everybody,  this is Jeff Rose from Today I am going to talk a little bit about a common question that I get quite frequently. This question is:

Is just having a 401k enough to have a successful retirement?

It is a very good question because a lot of people wonder about, am I saving enough? Am I putting enough away to make sure I get enough to retire when I want to retire and is the 401k only thing that we need to get us by? And I would say that generally speaking that answer is no. As far as my reasoning and logic behind that is this.

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Social Security Spousal Benefits Rules: Retirement Income For the One You Love

For many of my baby boomer client that are close to retirement, calculating their Social Security Benefits is an important part of the financial planning process.  It’s important to have a good understanding of the monthly benefit so that we know which other retirement buckets will be producing the short fall (if any) of their income needed for retirement.  In many of my client situations, the husband has been the primary bread winner, so there isn’t much question on their Social Security Benefit.What does arise some questions is the spouse’s social security benefit.   It can be confusing in situations where the spouse worked some years back, and is not totally sure to how much they paid into social security.
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