Planning on Retiring Early? Use These Three Retirement Savings Strategies
August 10, 2017
According to Tom Anderson, here are some strategies early retirees can use to maximize their retirement savings:
Rule 72(t) distributions
To avoid the 10 percent penalty once you begin distributions, you must continue to take the required distribution for the longer of five years, or until you reach age 59½. Once distributions begin, if the series of payments is modified in any way, the 10 percent penalty will be imposed retroactively beginning with the first year of distribution.
In a taxable account, the money in the account is yours, minus capital gains taxes, without any strings attached to distributions.
“[Roth conversions] require careful tax analysis each year, after the year is over, and before taxes are filed to determine the capacity for additional withdrawals or conversions,” said Pearce Landry-Wegener, a CFP at Summit Place Financial Advisors in Summit, New Jersey.