I’m 57 with $700k: Can I Retire? Today, Troy Sharpe CFP® delves into viewer questions and comments from his original retirement planning video, addressing concerns such as accessing 401k principal penalty-free, managing expenses during retirement, navigating health insurance after leaving employment, and the potential impact of Social Security cuts. This video discusses potential solutions, including understanding IRS regulations for early retirement account withdrawals, adjusting spending based on investment performance, exploring subsidy options for health insurance, and considering means-testing proposals for Social Security.
🏃🏻 Jump right in:
00:00 Understanding Retirement Planning Concerns
01:08 Exploring retirement account Access Strategies, Including Rule of 55
02:11 Addressing Financial Challenges in Retirement
03:25 Navigating Health Insurance Options
05:15 Strategies for Managing Healthcare Costs
06:47 Analyzing the Impact of Potential Social Security Changes
11:39 Evaluating Stock Market Forecasts and Economic Factors
20:47 Developing a Personalized retirement plan
#retirementincome #socialsecurity #401kprincipal
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Disclaimer:
Nothing in this video is investment, legal or tax advice and should not be construed as an investment recommendation, or an offer to buy or sell any security. Investing involves risk. Advisory services are provided through Oak Harvest Investment Services, LLC, a registered investment adviser. Insurance services are provided through Oak Harvest Insurance Services, LLC, a licensed insurance agency….(read more)
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As retirement savings plans go, the 401k is one of the most popular. It allows employees to save for retirement through contributions made from their paycheck on a pre-tax basis. While the goal is to leave the money invested until retirement, some individuals may find themselves in need of funds before they reach the age of 59 ½ when penalties are waived. There are a few important considerations when contemplating an early withdrawal from a 401k, including the Rule of 55, health insurance, and Social Security.
One way to access funds from a 401k without penalty is by using the Rule of 55. This rule allows individuals who separate from their employer in the year they turn 55 or later to take withdrawals from their 401k without incurring the 10% early withdrawal penalty. While this exemption only applies to the specific 401k associated with the employer from which the individual separated, it can be a helpful option for those who need funds before reaching the age of 59 ½.
Another important consideration when thinking about an early withdrawal from a 401k is the impact on health insurance. Many individuals rely on employer-provided health insurance coverage, and separating from an employer can result in losing that coverage. In some cases, individuals may qualify for COBRA continuation coverage, which allows them to continue their employer-provided health insurance for a limited time. However, COBRA can be expensive, and it’s essential to consider the cost implications before making a decision to withdraw funds from a 401k.
Finally, taking an early withdrawal from a 401k can also impact Social Security benefits. Social Security is a critical source of income for many retirees, and the amount of benefits received is based on the individual’s lifetime earnings. Withdrawing funds early from a 401k can reduce lifetime earnings and, in turn, lower Social Security benefits. It’s essential to weigh the potential impact on Social Security benefits before deciding to withdraw funds from a 401k.
In conclusion, while the 401k can be a valuable tool for saving for retirement, there are important considerations to keep in mind when contemplating an early withdrawal. The Rule of 55, health insurance, and Social Security are all factors that should be carefully considered before making a decision. Before taking an early withdrawal from a 401k, individuals should consult with a financial advisor to fully understand the potential impact on their financial situation.
If my full retirement age at 67 puts me right at the time they plan to reduce payments, my question would be is it better to take social security at age 62 to get the several years of payments before they cut it or wait to collect at 67 and have that benefit reduced
The lower than expected US stock market for the next 10 years is why I use covered call ETFs as a part of my portfolio. I use market index covered call ETFs for the S&P 500, Nasdaq 100, Dow 30 and the Russel 2000. I do not have to as much capital and figure out the strike prices.
In 2024,don't set new year financial goals without consulting a financial adviser.there expertise ensure a solid plan for success.Building wealth involves developing good habits like regular putting money away in intervals for solid investments.
I need to educate myself on these choices. I am 55. Any book/article/online courses recommendations? Avid reader/learner.
There are SS solutions that do not require making the working class work longer and receive less funds, but that would require the Rich to pay their share.
"No one is discussing cutting Social Security/Medicare benefits? Uh Republicans are.
Great information. Thanks.
The standard deduction would go down if the tax cuts and jobs act expires, but won’t we get personal exemptions back again? That would offset a lot of the standard deduction loss.