Withdrawing from IRA and 401k at 35.. around 200k
Hello blind people: Want to know if anyone has any guidance on whether there is a penalty free way of withdrawing from 401k at 35 and not pay penalty. I have over 150k in individual ira and 50k in regular 401k and all of that is with fidelity net benefits. Please advise if there is a legal penalty free possible way of withdrawal. Most importantly: Has anyone actually done it and avoided penalty? Thank you.
You can take a loan up to 50k or 50% (whichever is higher) and pay yourself back with loan terms you negotiate with the fund. You do pay interest but the interest is paid to yourself
No intention of paying back though! Thanks for advise
Your principal from your IRA can be withdrawn penalty free
If it's Roth
Another way for 401k is SEPP 72t
True for IRA too right?
Yeah
Did you try Google? This was the second result for me. https://www.irs.gov/retirement-plans/hardships-early-withdrawals-and-loans Remember that if your employer contributes to your plan then that can cause additional complications. I suggest talking to a financial advisor. Paying them for a 1 hour consultation is a hell of a lot cheaper than messing up and paying out the ass in penalties.
I’ve always wondered if you could convert ira to self directed ira, invest all proceeds into a business which employs you, live overseas for a year and pay yourself a huge income in a low tax country using the ira money.
This violates the IRA rules, so would count as a withdrawal for tax purposes. So is e.g. buying a house with self-directed IRA and then using your own labor to improve the house and flipping it
You aren’t allowed to start your own business? Or you aren’t allowed to hire yourself?
Is it Roth or traditional? One advantage of Roth is you can always withdraw the money you contributed without penalty and it's only the gains on that money that you pay a penalty to take out.
But Roth is after tax isn’t it ? So you do pay taxes on the principal
Yeah, but since those taxes are paid before you put the money in you can get that money out later without a penalty, so it's a bit more flexible. You'll pay a penalty if you take the gains out but at least I'm the first few years that will be less of the money.
Only penalty-free ways to withdraw from retirement accounts early are listed here, bookmark it: https://www.madfientist.com/how-to-access-retirement-funds-early/
Yes it’s possible. See https://rootofgood.com/roth-ira-conversion-ladder-early-retirement/
Thanks bag 💼 :)