Inside Out Money 112. Withdrawal strategies in early retirement - A flexible strategy and account playbook to fund your retirement
May 25, 2025
Explore the essential strategies for withdrawing funds in early retirement, moving beyond the 4% rule. Discover how to access your retirement funds early and the intricacies of Roth conversion ladders. Gain insights into asset allocation using a bucket strategy tailored to your spending needs. Learn about risk management, including sequence of returns risk and preferred withdrawal order. With practical tips on flexibility and tax implications, you'll be equipped to create a resilient retirement plan.
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Flexibility Within A Framework
- Retirement planning needs a flexible framework, not a rigid plan.
- Expect to adjust your withdrawal approach as life and markets change.
Limits Of The 4% Rule
- The 4% rule is rooted in historical research but carries big caveats.
- It assumed a 30-year horizon and constant inflation-adjusted withdrawals.
Tap Roth Contributions First
- Use Roth IRA contributions as an early-access tool because principal withdrawals are penalty-free.
- Keep earnings untouched to avoid penalties before 59½.