Wow, how about that stock market?  It’s a phrase we keep having to dust off and use again, as the years go by and the market keeps surprising us.  When it crashes, some of us worry because we see our retirement stash shrinking.  But even when it rises to record levels and then to super-duper-crazy record valuations, we find reason to worry. Because that just means an even bigger crash is coming, right? Especially when […]

Retiring early sounds like the ultimate encore. You walk off the corporate stage at 50 or 55, the crowd goes nuts, and you throw your ID badge into the pit. SEE YA! Then the house lights come on. But then you realize most of your money is sitting behind a locked door with a sign that says “Come back at 59½.” haha! I retired at 50, so I’ve been living in this gap for a while now. […]

Don’t miss an episode of our podcast, Personal Finance for Long-Term Investors. Available on all podcast players. Here’s the latest episode: In Episode 152 of my podcast, I alluded to a “early retirement withdrawal checklist.” Here it is in written form. We’ll divide the list into two parts: The bare-bones, simple ideas that probably feel like common sense to most people. The more complex strategies that many of you might have probably heard of – or not. Or you’ve heard of them, but can’t explain them. You might not know the details of this second tier. Tier 1 – The Basics of Early Retirement Withdrawals This first tier is so basic that you could explain it to someone who knows nothing about personal finance, and they would understand everything on this list. Cash Accounts First things first, start spending extra cash. If you have one or two years’ expenses in cash, that’s a very common thing to live off of in early retirement. Taxable Brokerage Withdrawals Sell some shares, pay some long-term capital gains on the gains portion of it, live off the proceeds. Your taxable brokerage account is time-flexible. It’s not tied to any specific withdrawal ages. Dividends and Interest Your taxable accounts create an income stream through interest and dividends. Rather than reinvesting those dollars, you should live off them. These are likely the first dollars that come out of your brokerage account.  Side Income / Part-Time Work “That’s not retirement!! You’re still working!!” I get it. Some folks see a “part-time retirement job” as an oxymoron. But others think about “barista FIRE” or “coast FIRE” as reasonable retirement scenarios. These scenarios often involve an employment income stream and the simultaneous time-flexibility of retirement. A little bit of income can go a long way in early retirement. Rental Real Estate (and Other “Passive” Business Income) Do you own assets or business(es) that let you “step back” from day-to-day management while still collecting revenue? If so, that’s a great way of funding your early retirement years. Tier 2 – More Complex Ideas Tier 1 seems like common sense. Most people – whether they care about personal finance or not – understand how to live off cash, flexible investments, real estate assets, etc. But now we get to the “fun” part. The weird, nuanced, corner case, esoteric ideas that simply aren’t common sense. These are the types of strategies that even many financial advisors and accountants aren’t entirely familiar with. Roth IRA Contribution Withdrawals This applies to contributions. Not earnings. That distinction is vital. Your Roth IRA contributions (not earnings!) can be withdrawn at any time, tax-free and penalty-free. I could do it right now at age 36. I could empty my entire Roth IRA of the contributions (not the earnings!), tax-free and penalty-free. People often use this in early retirement.  Roth IRA Conversion Ladder In

I am writing this at 9.30 on a Monday morning, sitting in the garden. Mrs Accumulator has just waved to me through the window and I can scarcely believe she’s there. The past year has been strange, full of awkward trials and tiny tribulations, but the moment that’s just passed between us – well, it doesn’t get better than that. 1 About five years ago, 2 I’d have been desperately fighting bin-fires at the office, […]

In this post, I offer a brief response to a recent thoughtful Reddit post. Credit to the poster for putting his or her views out there in an organized fashion and continuing the discourse. The poster is concerned about one of the predictions Cody Garrett and I make in the book Tax Planning To and […]

Welcome back to another monthly update from Root of Good! We are at home in Raleigh for a two month stretch right now. I forgot how nice it is to relax at home!  During August, we spent a week in northern California visiting the Redwoods National Park and state parks. The last few days of the trip we spent driving south along the Pacific Coast Highway and enjoyed other scenic drives in the area.  In […]