Age 59-1/2 is when the IRS says you can finally begin to access the hard-earned retirement savings you’ve got in your tax-sheltered accounts like your 401(k) and IRA.
For most people who retire at age 62, the age 59-1/2 requirement is no problem. But if you’re a diligent saver and on track to reach financial freedom long before then, this can be a huge log in the road!
I had this problem for years. In my twenties when I first started learning more about personal finance, I began to realize how powerful compounding returns were and started making strives to save more and more into my 401(k) and IRA every year.
I kept re-running the numbers, and found I could retire as soon as age 55 … then age 50 … and now as soon as age 46!
But then I hit a wall! I noticed that almost every type of retirement account did not allow withdrawals until age 59-1/2. If you did try to take out your money early, then you’d have to pay an annoying 10% penalty (which would really dig into your gains).
I was frustrated … and there had to be a way around this!
Finding the Solutions
I knew that other people from online blogs and books I had read had somehow been able to pull off this whole “retire early” thing. And so I began to do my research.
For the next few years, I immersed myself in the stories of early retirees and carefully paid attention to how they were able to pull it off. I dissected the finances they reported and took note of any strategy they used to create income streams before age 59-1/2.
Sometimes their techniques used little-known IRS loopholes to gain early access to their savings. Other times it included creating alternative ways to make money. Everything was on the table for evaluation!
That is what my latest ebook (#4) “Early Retirement Solutions: How to Unlock Your Savings Before Age 59 ½ Without Penalty” is all about. It’s my collection of all the best tricks and techniques I’ve found for tapping your money when YOU want to.
Each of the strategies we’ll go through are ones that are used by real retirees found on personal blogs and other online forums. Wherever it’s applicable, I’ve also included links back to the actual IRS pages that also highlight certain rules and exceptions that will help you along the way.
Knowing what your options are and that you have the ability to exercise them can make years of difference in when you decide to declare your financial independence. As you’ll find out, your money isn’t truly “locked up”. There are actually quite a few different ways you can get access to it and start making withdrawals as you need them. There will, of course, be some rules and things to watch out for. But if you’re clever enough to have come this far on the path to early retirement, then you should have no problem following along and being successful.
Get your copy from Amazon now! And as a favor to me, if you enjoy this book, please leave some honest feedback on Amazon. By doing so, you’ll make it easier for other people just like you to find this title within the Kindle bookstore and learn about the same useful strategies.
The Start of the “Early Retirement Solutions” Series
The title “Early Retirement Solutions” is the name I’ll be giving to a series of other ebooks I plan to write over the next few years targeting other specific questions you might have about early retirement and how to get there.
When it comes to financial freedom, there are so many things that can trip you along the way. Everything from the best ways to save your money to tax avoidance and knowing just how much is the right amount to withdraw safely. I plan to spend a little bit of time with many of these sorts of topics and do a deep-dive into each one individually.
If there are any special questions or topics you’d like to see me cover, please feel free to let me know by commenting below or sending me an email. I’d be glad to hear what you’re interested in knowing more about.
Technical Notes
In case you’re wondering how I was able to write another ebook so quickly after the release of my third ebook “Retire Sooner”, the truth is: I didn’t!
The contents of this book are notes I’ve been collecting for years. I started drafting them into an ebook format in the late Fall of 2015, but then hesitated to finalize it because I was considering using the content to start a new website instead. In the end, I concluded that information was better suited as a ebook, and so I went ahead with the publishing.
One other fun fact: For this ebook and my last one, I’ve actually learned how to format ebooks for Kindle myself. As it turns out, it’s not that complicated. This is a big advantage for me because it means that I’ll now be able to revise and release ebooks whenever I want without having to wait for someone to format it for me.
Readers – What strategies are you using to fund your early retirement? How are you going to bridge those years between when you declare financial freedom and age 59-1/2?
Featured image courtesy of Amazon
Congrats on your 4th eBook. It seems like yesterday you published the 1st one. Time is of the essence in life. Good luck and I look forward to reading it.
Thanks EL, and I hope you enjoy reading it! I’m hoping to have 5-6 books under my belt before the year is over. However, I’m being very critical by putting quality ahead of the schedule.
Congratulations on your new book.
I started thinking about this same problem a number of years ago. Since then, I have been investing in my “Retire at 65” accounts and separately in my newly named “FIRE” accounts.
But because I have been investing in the tax-deferred accounts for a much longer period of time, there’s more money in those accounts and I would be interested in learning more about how to access those funds prior to age 62 1/2.
Thanks and good luck with the book.
FS, you’ve got the right idea investing more into the tax-deferred accounts and getting 33% more for your money. You’ll definitely pick up some worth-while strategies in my new book.
Congrats on the new book! I’ve added it to my reading list.
Personally, I use Calibre to format my electronic publications which can output epub and mobi which can be viewed on Kindle or easily converted to Kindle format. So much better than a PDF when you’re reading it on a Kindle or other e-reader since the text will scale and flow appropriately for the device.
For bridging the financial gap, my focus isn’t early retirement given my age and family situation, so it’s less of a concern. However, I do keep some investments outside tax advantaged accounts so that I can access the funds whenever I need without penalty.
Looking forward to reading your new book!
Thanks for downloading it, Jack! Any feedback you’ve got will be appreciated.
I’ve heard of Calibre, but haven’t tried using it. Do you have any good links or resources for learning how to use it?
Congratulations on the new e-book! I am impressed that you have maintained an active blogging schedule AND managed to crank out another e-book. I plan to download the new book later this afternoon.
Without having read the new book, I think an interesting angle for a future book could be to perform a few case studies on actual early retirees. This would be valuable, in my opinion, because I think most people have an invalid view of what early retirement actually looks like for the average person.
Thank you for downloading it, and I hope you get a lot of good ideas from it! Please be sure to let me know what you think.
I love that idea! I had actually considered doing something similar to that for a blog post series. I did a case study on the Charltons after reading “How to Retire Early”, and there were so many effective strategies to take away. I’m sure expanding that to other real life stories would make those lessons that much more valuable.
Nice e-book. Thanks for sharing this book with us, MMD. So excited to read it.
Thanks Jayson! I hope you really enjoy it. Be sure to let me know what you think.
I’m just taking the risk that I can earn more with side hustles so that I don’t have to go back to traditional work.
There’s a good chance you probably will! Given all the side hustle income I see people making today online, I’d say there’s a lot of gold in the hills to be found!
Well, looks like I missed the free window, but I am very interested to read this!
Sorry about that, Kalen. Amazon only lets you do the free promotion for 5 days. There are a lot of useful ideas stuffed in there, and I also try to illustrate them with plenty of examples.