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Radical Personal Finance

314-How You Can Get More Money For Early Retirement By Using an IRA or 401(k) Even if You Have to Pay the 10% Penalty!

Radical Personal Finance

Joshua J. Sheats, MSFS, CFP, CLU, ChFC, CASL, RHU, REBC, CAP

Self-improvement, Business, Education, Investing

4.2 • 1.9K Ratings

🗓️ 24 March 2016

⏱️ 50 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Have you ever wanted to invest through an IRA or 401(k) for the purpose of early retirement but found yourself stymied by the thought of paying a 10% penalty tax to gain access to your money?

Well, on today's show I've got good news!

If you invest through an IRA or 401(k) but later take the INCOME from the account to pay for an early retirement, you may still come out ahead of the taxable account, even though you need to pay the additional penalty tax!

Check out the show and attachments for details!

Enjoy.

Joshua

Transcript

Click on a timestamp to play from that location

0:00.0

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0:04.4

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0:09.2

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0:14.6

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0:19.8

Lenovo.com slash yoga, limited time only terms and conditions apply. Engineered to do it all. That's a laptop

0:25.9

evolved with Intel Evo Platform. Many people in this audience are working very diligently to save enough money to retire early.

0:37.0

Early meaning before age 59.5.

0:40.0

The challenge is, what types of accounts do you use to save for this after all if you use an IRA and you take the money out before 59 and a half you're going to pay a 10% penalty for the privilege of having access to your own money, right?

0:54.9

Well, today I'm going to share with you why, even though that is the case, you might still be better off investing through an IRA or 401k or 403b for early retirement

1:08.0

rather than using a non-tax qualified brokerage account.

1:16.1

Early retirement community,

1:17.4

here's a little bit of gift of knowledge

1:18.9

that I pass along to you today. today. Welcome to the Radical Personal Finance Podcast. My name is Joshua Sheets and I am your host, your fellow adventurer. This is the show where we work every day on strategies

1:46.6

and tools and techniques to live a rich life now while building a plan for

1:50.6

financial freedom in 10 years or less. I hope that little gift of knowledge

1:55.0

thing didn't sound arrogant because you know what? I was flat out wrong on this a week ago.

1:59.6

And today I'm going to tell you why and where I messed up. This is most definitely one of those things where I had to, well I had to get my calculator out,

2:15.2

but I realized that I was completely wrong. Now I won't keep you sitting around on pins and needles. I'll just tell it to you straight out. Did you know that if you are investing through a 401k or IRA, and if you are taking the income

2:28.8

from the account out at an early age, meaning before 59.5, so that you're still subject to the 10% penalty.

2:40.0

Did you know that even if you're paying the penalty by using a 401k or an IRA, you can still come out ahead

2:51.3

then investing your money after taxes.

2:55.0

Now there was one very important caveat in that statement.

...

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