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jedash · Oct 20, 2006, 03:56 PM

I'm planning to retire at age 45, maybe 46. What would be the best way to extract money with least amount of penalty? I've been told annuities or something like that. Also, what would be a maximum annual amount that I could get? Thanks!

Ace High · Oct 20, 2006, 04:32 PM

Jedash,

I'm no expert but I do believe the experts are going to need a lot more info. 45 seems awfully young to be expecting some sort of miracle "money tree" to grow suddenly. The experts will need to know what kind of investments you have, what kind of principle you have invest already, are any in "retirement" funds that can't be touched till you have reached a certain age, etc. Good luck with your "retirement" Ace

walt17 · Oct 22, 2006, 05:55 PM

Jedash, You planned well if you are retiring at that age.
Now to your question. If your retirement is in an IRA or 401K, you will almost certainly pay a penalty. You also need to talk to the financial institution which holds it as they may access a penalty.
Start with your financial institution, then visit a financial planner. A good planner can tell you if you fit one of the few exceptions to paying a penalty. He/she can also give you direction (second opinion) to be sure your retirement years are adequately funded.

Enjoy,
Walt

jedash · Oct 23, 2006, 12:35 PM

Originally Posted by Ace High

Jedash,

I'm no expert but I do believe the experts are going to need a lot more info. 45 seems awfully young to be expecting some sort of miracle "money tree" to grow suddenly. The experts will need to know what kind of investments you have, what kind of principle you have invest already, are any in "retirement" funds that can't be touched till you have reached a certain age, etc. Good luck with your "retirement" Ace

Sorry Ace High, you're right - not much to go on. No miracle $ tree, just a couple of pre-IPO investments, one of them starting to pay out quarterly dividends in 3 months. Had 401k and rolled to self-directed IRA (~$125k starting capital). Invested in pre-IPO's. One is projected to return several hundred thousand annually - per share (of which I have 4 shares, $5000/share). The other is a little further out (guessing a year or two until public) and I have 50,000 shares of that at $2/share. Have 401k that I contribute to presently while I'm working valued around $145k. Of course I plan to wait and see what actual monies land in account on quarterly basis before giving up my day job. I wouldn't really retire, just work at something I really enjoy, and take more vacations, you know, work as an option. Thanks for replying.

ScottGem · Oct 23, 2006, 12:44 PM

The first thing you need to do is determine what income level you need in your "retirement". Then look at vehicles that will produce such an income level. Tax Free investment paying quarterly dividiends is one possibility, Annuties are another.

You also need to remember things like medical coverage. Will you be able to continue coverage from your current employer at want you pay now? Probably under COBRA you can continue it but paying the full amount. You might able to increase deductibles to lower premiums.

I would leave the IRA and 401K monies alone until you can start withdrawing them without penalty.

jedash · Oct 23, 2006, 12:55 PM

Originally Posted by walt17

Jedash, You planned well if you are retiring at that age.
Now to your question. If your retirement is in an IRA or 401K, you will almost certainly pay a penalty. You also need to talk to the financial institution which holds it as they may access a penalty.
Start with your financial institution, then visit a financial planner. A good planner can tell you if you fit one of the few exceptions to paying a penalty. He/she can also give you direction (second opinion) to be sure your retirement years are adequately funded.

Enjoy,
Walt

Hi Walt, thanks for replying. I've tried to plan well. Sounds like good information you've given me. Hadn't thought about my trust company having a penalty, I will check into that and see. Financial planner was on my list of people to contact. My reirements are both IRA and 401k. 401k I'm working on right now, IRA is where I'm doing my venture capital investments from. Appreciate the info!
jedash

jedash · Oct 23, 2006, 01:03 PM

Originally Posted by ScottGem

The first thing you need to do is determine what income level you need in your "retirement". Then look at vehicles that will produce such an income level. Tax Free investment paying quarterly dividiends is one possibility, Annuties are another.

You also need to remember things like medical coverage. Will you be able to continue coverage from your current employer at want you pay now? Probably under COBRA you can continue it but paying the full amount. You might able to increase deductibles to lower premiums.

I would leave the IRA and 401K monies alone until you can start withdrawing them without penalty.

Hi ScottGem
Thanks for responding. Hadn't considered medical benefits. Glad I found this site, getting some good info. As far as vehicles to produce desired income - I think I have those now, just need a way to minimize penalties and get early withdrawals. Leaving IRA and 401k monies until I can get penalty free will be another 15 years - I don't want to wait that long. Was thinking about annuity that would give me what I want as far as income and increase that amount to cover taxes and penalties - so I stlill net out what I want annually. Make sense?
jedash

ScottGem · Oct 23, 2006, 01:18 PM

You definitely need to talk to a financial advisor knowlwegeable in the tax implications of early withdrawals.

jedash · Oct 24, 2006, 12:39 PM

Originally Posted by ScottGem

You definitely need to talk to a financial advisor knowlwegeable inthe tax implications of early withdrawals.

Thanks ScottGem, I will consult a financial advisor, appreciate your candor.

beachbumz · Oct 27, 2006, 08:57 AM

Hi Jedash,
You may want to check out a couple of early retirement web forums, www.retireearlyhomepage and www.raddr-pages.com . You will find a tremendous amount of information there.
BB

jedash · Oct 27, 2006, 05:05 PM

Originally Posted by beachbumz

Hi Jedash,
You may want to check out a couple of early retirement web forums, www.retireearlyhomepage and www.raddr-pages.com . You will find a tremendous amount of information there.
BB

Thanks Beachbumz! I will check out the links.
jedash