The accountant says we can retire early. Woohoo!!!

[Torvy]

Like the person I know that had all his retirement in ENRON with a few tech companies added.

Maybe the lesson is whatever he was in is exactly what avoid…?

I doubt social security will be wiped out but we all know those with investments wiped out.

I do like the ability to pass on the remaining 401k after death.

But then I know a guy that passed early but social security is sending checks to his widow and children and he never earned much and the math shows his heirs will make out quite well… the youngest was 2 when he passed.

Investments get wiped out because people buy individual stocks and frequently have no idea how to invest.

The S&P 500 index is, essentially, a mutual fund of 500 of the most stable stocks. This crosses industries. This is just an example. There are other funds that produce consistent results with little risk. Because this stays put and is limited to these safe investment funds (no individual stocks or bonds), the risk is transient. (Meaning your portfolio can go up and down, but consistently trends up over time).

If those got wiped out at the same time, we would be dealing with something so big that money would be meaningless anyway.

 

[Torvy]

Not everyone pays into social security or at least some opted out but not well enough informed to detail.

Oh, I know. As a teacher, I had TRS instead, plus a variation of a 401k. But, I worked in the private sector longer. Regardless, the same system can be in place of all government mandated retirement systems that exempt one from SocSec.

No legal way to "opt out', it's just variations for government workers.

 

[CloverKnollFarms]

Most people can invest in an index fund and beat an active trader, and any government retirement fund.

 

[Bearsixty7]

Wife did something like this. Fixed annual withdrawal for 5 years. I was going to, but we managed to get by until I reached 59.5.

http://httI thought this was th ean... ps://smartasset.com/retirement/new-sepp-rule

I thought this was the answer I've been looking for but not so sure due to the section below. I turn 59-1/2 December 2026 but my 401K has already exceeded what I calculated I would need in it by then for a very comfortable income for 30-35 years. So I was thinking I could retire 12-18 months early (As in May/June 2025) but how to access the "excess 401K" during that 12-18 months without taking a 10% hit.

"A SEPP plan is a method for converting retirement assets into annual payments that continue for five years or until you reach age 59.5, whichever comes later."

If it was whichever comes first I'd be golden!
I'll have to do some math and see what payments would work for those 5 years, maybe I can still retire next year!!

 

[Torvy]

We had the same questions. I'm couple years older than you.

Wife started hers a couple of years ago. Then she went back to work a contract with a good bonus if she stayed a year. I retired last May, so had income too. So, this year, I rode it out. She has 3 more withdrawals coming. I hit 59.5 in November. We can just use mine as needed to ensure we are good after November. Likely nothing this year. She's 7 months younger.

If your wife is younger, have her do the early withdrawals and make it up later (or vice versa if you are younger).

Other options...live really tight for a while; or, eat the 10% on whatever you need to get you from retirement to 59.5.

It's exciting and a tiny bit scary, but very doable for people who handle money well.

 

[ultrarunner]

Investments get wiped out because people buy individual stocks and frequently have no idea how to invest.

The S&P 500 index is, essentially, a mutual fund of 500 of the most stable stocks. This crosses industries. This is just an example. There are other funds that produce consistent results with little risk. Because this stays put and is limited to these safe investment funds (no individual stocks or bonds), the risk is transient. (Meaning your portfolio can go up and down, but consistently trends up over time).

If those got wiped out at the same time, we would be dealing with something so big that money would be meaningless anyway.

People have no idea how to invest is my point.

Oh, I know. As a teacher, I had TRS instead, plus a variation of a 401k. But, I worked in the private sector longer. Regardless, the same system can be in place of all government mandated retirement systems that exempt one from SocSec.

No legal way to "opt out', it's just variations for government workers.

I’m thinking of religious, etc.

Who Is Exempt From Paying Social Security?​

Members of certain religious groups may be exempt from paying Social Security taxes. They must waive their rights to benefits, including hospital insurance benefits. They must also be a member of a religious sect that's conscientiously opposed to receiving private death and retirement benefits and provides food, shelter, and medical care to its members.9


Most foreign students, scholars, teachers, and researchers are exempt if they're nonimmigrant and nonresident aliens.1011 Foreign citizens who work in the U.S. for a foreign government such as diplomats or consular officials don't have to pay in, either.12 State and local government employees who are covered under a public retirement plan don't have to pay twice by paying into Social Security as well

 

[DarkBlack]

I thought this was the answer I've been looking for but not so sure due to the section below. I turn 59-1/2 December 2026 but my 401K has already exceeded what I calculated I would need in it by then for a very comfortable income for 30-35 years. So I was thinking I could retire 12-18 months early (As in May/June 2025) but how to access the "excess 401K" during that 12-18 months without taking a 10% hit.

"A SEPP plan is a method for converting retirement assets into annual payments that continue for five years or until you reach age 59.5, whichever comes later."

If it was whichever comes first I'd be golden!
I'll have to do some math and see what payments would work for those 5 years, maybe I can still retire next year!!

I don’t know your details, but you can probably use the rule of 55.

 

[Torvy]

I'm not explaining myself well.

In my hypothetical, you'd basically have a handful of investment choices. All of the broad-based, low risk indices. Zero need to understand investing. Literally could choose any and come out well above SocSec. Let people move among the indices as they wish. Some will do nominally better than others, but all will do well.

Those 'certain religious' have their own retirement plans fed by their charities. Nothing needs to change for them. They aren't in Soc Sec now anyway.

The foreign teachers, students and govt employees groups don't draw Soc Sec either. They get what is offered in their own countries.

The only group of these that matter is the state and local government employee group. I'd personally end the split system. Trust me, it's a PITA, when you have both. You could continue to exempt them and let them opt out of SocSec.

I'd love for it all to be optional, but just like insurance, some people would opt out and then cry when they are 65 and broke.

 

[Torvy]

I don’t know your details, but you can probably use the rule of 55.

True. I know in my case, my current 401k (ish) plan was too small. Most of my money was in accounts from previous jobs.

 

[ultrarunner]

some people would opt out and then cry when they are 65 and broke.

The back up is senior section 8 housing with some very nice senior only properties, reduced utilities, taxi vouchers, food program, etc…

Quite a few seniors in major metro that have tapped into a huge safety net…