560: Dude ACTUALLY Withdraws From His 401(k) and Retires at 47
Description
Did you know you can use your 401(k) to retire early? Yep, it’s possible. And today’s guest, Eric Cooper, is doing it atage 47! Most FIRE chasers search for how to withdraw from a 401(k) early but know that doing so will hit them with substantial penalties. The best way around this? The 72(t) rule—which is precisely what Eric has been taking advantage of. Eric uses the 72(t) rule’s “substantially equal periodic payments” to take early withdrawals from his 401(k) of $30K per year, starting at age 47. But how does it work?
Eric comes on the show to describe exactly how this early withdrawal rule works, how much you can take out, the regulations to follow so you avoid penalties, and why early retirement may be much closer than you think. But this isn’t the only early retirement income Eric has got. We’ll review his substantial real estate portfolio and detail Eric's almostunbelievable tax savings from combining tax-advantaged rental properties with rule 72(t).
Plus, Eric shares how he built a multimillion-dollar nest egg by his mid-forties and why those starting young on the path to early retirement can repeat his strategy to be much richer in retirement. Do you have money sitting in retirement accounts that you’re ready to use? The 72(t) rule might be just what you need.
In This Episode We Cover
How to access retirement funds early with the often overlooked 72(t) rule
Escaping the “middle-class trap” that stops you from retiring on your terms
Avoiding 401(k) penalties and using retirement accounts to actually retire early
The rules and regulations you MUST follow to withdraw penalty-free
How Eric amassed such a massive retirement account balance (and how you can, too)
Early retirement healthcare and how to lower your taxable income to greatly reduce premium costs
And So Much More!
Links from the Show
BiggerPockets Money Facebook Group
Network with Other Investors on The Path to FIRE Through the BiggerPockets Forums
Finance Review Guest Onboarding
Listen to All Your Favorite BiggerPockets Podcasts in One Place
Apply to Be a Guest on The Money Show
Find an Investor-Friendly Agent in Your Area
Find Investor-Friendly Lenders
How to Access Retirement Funds Early
See Mindy and Scott at BPCON2024 in Cancun!
How the “Middle-Class Trap” Stops Your Early Retirement
00:00 intro
01:14 What is Rule 72(t)?
05:30 Avoiding Early Withdrawal Penalties
11:12 Building a BIG Nest Egg
17:14 Retiring Early at 47!
18:00 Different Investment Accounts
21:41 Why Withdraw Early?
24:52 Rental Income and Healthcare
30:44 Selling the Rentals?
32:54 Calculating Your 72(t) Income
38:40 Advice for Early Retirement
41:18 Connect with Eric!
Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/money-560
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