The 4% rule for retirement is a rule of thumb developed to determine what a safe withdrawal amount is for a retiree on an annual basis. Safe is roughly defined as not depleting the underlying assets for 30 or more years.
What is the FIRE Movement?
The Financial Independence, Retire Early Movement (FIRE) is a movement where adherents attempt to change their lifestyle to become financially independent, thereby retiring early. Many of the unofficial tenants of the FIRE ideology buck traditional western lifestyles, seeking a simpler and more sustainable way of life. The term itself doesn’t reference a specific methodology, however, its birth can be tied to specific written works.
401(k) Tricks to Retire Early Using Rule 72(t)
Code 72(t), Section 2, also known simply as ‘Rule 72(t)’ is the ticket to retiring early. Utilizing this provision in the tax law, a diligent saver can start taking money out of their retirement accounts prior to the age of 59 and 1/2 years old. In fact, they can take money out at any age provided they follow some critical rules.
2021 401(k) Contribution Limits
Every year, beginning in the Fall, the Internal Revenue Service (IRS) takes a hard look at how the cost of living has changed for retirees from the previous year and often makes an adjustment to the amount employees and employers can make to 401(k) accounts (this also usually includes 403(b) and Thrift Savings Plan (TSP) participants as well).