We're considering withdrawing from retirement accounts using SEPP for early retirement, seeking your insights.
At 57 and 58, having left our previous jobs after 55, our goal is to use our savings to buy our next home in the eurozone. However, most of our cash is allocated for this move, prompting me to explore options to bridge finances until we're both 59 1/2.
My wife's 403(b) permits flexible cash withdrawals, while my 401(k) only allows lump-sum withdrawals. However, a "combination withdrawal" option exists for my 401(k), where a portion of the balance is rolled over to an IRA, and the remaining portion withdrawn as cash and a check sent.
We aim to fund early retirement from Q1 2024 to Q1 2026. Calculations suggest a withdrawal of $295,590 during this period using the VPW calculator.
While using her 403(b) alone is an option, a fairer distribution split would be 70% for me and 30% for her. The lump-sum withdrawal of my share in 2024 from my 401(k) would result in higher taxes compared to her 403(b) over the same period. Calculations estimate a tax difference of $10,400.
SEPP from my 401(k) and other retirement accounts seems viable, requiring an initial balance of $1,340,110 to withdraw my share ($95,425) in 2024. This method requires constant withdrawals until 2029, with tax implications similar to using her 403(b) alone initially and then lower than the lump-sum option.
Considering tax implications, SEPP appears favorable for funding my share of early retirement. Does this seem like the right choice?
At 57 and 58, having left our previous jobs after 55, our goal is to use our savings to buy our next home in the eurozone. However, most of our cash is allocated for this move, prompting me to explore options to bridge finances until we're both 59 1/2.
My wife's 403(b) permits flexible cash withdrawals, while my 401(k) only allows lump-sum withdrawals. However, a "combination withdrawal" option exists for my 401(k), where a portion of the balance is rolled over to an IRA, and the remaining portion withdrawn as cash and a check sent.
We aim to fund early retirement from Q1 2024 to Q1 2026. Calculations suggest a withdrawal of $295,590 during this period using the VPW calculator.
While using her 403(b) alone is an option, a fairer distribution split would be 70% for me and 30% for her. The lump-sum withdrawal of my share in 2024 from my 401(k) would result in higher taxes compared to her 403(b) over the same period. Calculations estimate a tax difference of $10,400.
SEPP from my 401(k) and other retirement accounts seems viable, requiring an initial balance of $1,340,110 to withdraw my share ($95,425) in 2024. This method requires constant withdrawals until 2029, with tax implications similar to using her 403(b) alone initially and then lower than the lump-sum option.
Considering tax implications, SEPP appears favorable for funding my share of early retirement. Does this seem like the right choice?
Statistics: Posted by cfo — Fri Jan 05, 2024 2:52 pm — Replies 0 — Views 8