Funding Retirement Before Age 59 1/2
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During ChooseFI episodes 475 and 491, Sean Mullaney and I tackled funding early retirement and accessing retirement accounts before age 59 1/2.
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One tactic we discussed is the 72(t) payment plan, sometimes referred to as a series of substantially equal periodic payments, a “72(t),” or a “72(t) SEPP.”
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72(t)s can be great, but they come with a downside: potential imposition of retroactive 10 percent early withdrawal penalties (and related interest) for missteps while on the 72(t) payment plan.
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Sean takes the conversation on 72(t)s to the next level with his recent article, What are the Risks of a 72(t) Payment Plan? In the article he breaks down the risks of 72(t)s and tactics early retirees can take to help avoid problems with 72(t) payment plans.
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If you’re thinking about an early retirement funded by traditional 401(k)s or IRAs or you just want to nerd out on 72(t) payment plans, I encourage you to read the article.
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A Meal Without Protein
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I ran a 75-minute panel on health and fitness at our recent live event here in Richmond, and in focusing on the importance of building muscle, I reiterated how important it is to eat protein and ideally to control your blood sugar spikes.
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One thing I said really resonated and I heard people talking about it the rest of the weekend:
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u201cA meal with less than 20 grams of protein isnu2019t a meal, itu2019s a dessert.u201d
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If we believe breakfast is the u201cmost important meal of the dayu201d then itu2019s an absolute crime that most foods that are considered u201cbreakfast foodsu201d are essentially just dessert.
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Think bagels, rolls, cereal, muffins, doughnuts, etc.
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Youu2019re eating a dessert first thing in the morning and wondering why you feel sluggish the rest of the day?
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Rethink breakfast entirely, go against what society has fooled you into believing you should eat, and eat something both satisfying and satiating.
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I often eat something like chicken thighs, Greek yogurt, vegetables, kimchi, blueberries, etc. for breakfast and it keeps me full and off the blood sugar rollercoaster.
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As an experiment, I suggest you try it and see how your body and brain react.
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An Intentionally Smaller Life
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I saw this quote from Sahil Bloom and think it aligns perfectly with my current life and FI mentality:
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u201cI used to think success meant having a u201cbiggeru201d life. More people. More goals. More things. I now believe that success means having an intentionally smaller life. Fewer friends, but deeper. Fewer goals, but clearer. Fewer possessions, but more meaningful. Simple is beautiful.u201d
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A few months ago, two things happened: (1) a major shakeup in my employer; (2) I looked at my accounts and thought “could I be at FI?” So there were a few weeks where I was pondering both. I started applying to new jobs, just in case. And I found a financial advisor who confirmed that I was at FI! I’m still working because this was a HUGE shock and I want to retire TO something instead of from something, so I’m taking some time to think that through.
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However, while I’m working through that, I’m finding it’s so much easier to let go of things at work. Snarky email? I don’t have to get upset. Long term plan I don’t agree with? I won’t be here. No guilt or fear about skipping happy hours and other things I just don’t care about. I love this freedom, even though I’m still working!
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u2014 Allison
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I wanted to share my 1% win this weeku2014itu2019s been a big one for both Katy and me. We recently took the time to slightly modify our monthly budget into a FI-focused budget, based on what our income and expenses will look like in three years when I retire from the Marine Corps.
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Running those numbers gave us an incredible sense of peace. Knowing that weu2019ll be financially independent once I retireu2014and that neither of us has to work unless we choose tou2014feels like a huge weight has been lifted off our shoulders.
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For Katy especially, it helped make the next three years of hard work and intentional living feel more purposeful. Like Dave Ramsey says, u201cToday weu2019ll live like no one else, so later we can live like no one else.u201d That perspective shift has done wonders for our mental wellbeing and motivation.
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Thanks for all the encouragement and practical wisdom you and the FI community shareu2014itu2019s made a real impact on our journey.
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u2014 Shane
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My credit card has a free DoorDash Dash Pass feature. Normally I wouldnu2019t say meal delivery is considered a wise move financially, but DoorDash also offers grocery delivery, and every now and again ALDI has some really great deals.
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Right now (at least in my area) they offer $30 off of orders $60+ for three straight weekends. I stock up mostly on meat to store in my freezer, helping us really save on our grocery bill for the coming weeks. Later today I will have $80 worth of food delivered to my doorstep for $45 total (including tip)!
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u2014 Melissa
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This 1% better is on the theme of “bronze is gold” for the ACA marketplace Open Enrollment season – I know this is a huge pain point for many right now with subsidies on the chopping block so perhaps this can provide some silver lining for a slice of the community, particularly those still in the accumulation phase.
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My employer-sponsored HDHP had premiums going up over 15% for 2026, so I decided to give the marketplace a try despite all the news about premiums being way up. I knew we wanted a plan with HSA eligibility to keep using that vehicle to invest tax-free for retirement. (We are fortunate to be in the “cry me a river” category of W-2 income too high to qualify for any subsidies.) We found an insurance plan type that I didn’t realize existed, as it seems to be a creature born of the brand new OBBBA rules: a ZERO-deductible plan with set copays for everything up to the out of pocket max, yet still HSA eligible because of its bronze status on the marketplace.
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This plan will save us $3k/year on premiums and about $2k/year with our typical (moderate) health care usage, based on running dozens of scenario simulations (thanks ChatGPT)! It does have a higher out of pocket max than our old plan, but the only way we would ever reach it is a truly disastrous medical emergency – and we would recoup that higher expense cap with just two years of savings on our average usage. So the new plan is way more predictable for all the care we typically get, and way more affordable for all but the worst-case scenario (and even then, not that bad).
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This is for a Maryland plan through UHC, but I suspect it is available in other states and from other insurers as well. Hopefully a win that others can take advantage of during open enrollment as well!
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u2014 Tom
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My 1% better this week was reading Rich Girl Nation by Katie Gatti Tassin and realizing I have been hoarding too much cash. I decided to reduce my new car and house down payment funds since I expect to not need either for at least 5 years and invest that cash into my taxable brokerage acct.
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Now I have my cash position down to 25% of my net worth (still a lot, but I didnu2019t want to invest all of it should something come up before 5 years.) By increasing my contributions to my brokerage, I am setting myself up for more options down the line. I love the flexibility and freedom I am setting up for my future self.
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u2014 Riley
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I’ve never really had any issues with dental care. This has lead me to save money by basically getting the “basic” plan for my dental health insurance for at least a decade. And because I’m not exceptionally joyful about dentists or doctors; I tend to let the checkups slide a bit … like 18 months between.
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So I finally had my checkup/cleaning last week and the dentist told me that my silver fillings (from the ’70s) are starting to cause microcracks in my teeth due to expansion and contraction. Even though they are not critical right now, they do need to be replaced with new fillings and one tooth should receive a crown because of the alignment of the cracks. The dentist then printed out an estimate of expense based upon my insurance (so I could plan what to do this year and what to carry over to next year based upon deductibles).
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Looking at the fine print, because of my “basic” plan; I was looking to approximately $3000 out of pocket expenses for all of the work after insurance payout. Then I realized we were right in the middle of open enrollment. So when I got home, I took a look at all of our dental plans and realized that for an annual increase of $168 ($7 increase twice a month) for the “Premium” package, I would decrease my total out of pocket expenses for the fillings/crown to less than $500 after insurance payout. So I immediately changed my selection because we were in the middle of open enrollment.
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I’d like to say that I had planned this from the get go, but the fact of the matter is it was Divine Providence, coincidence, or karma (pick your preference) more than any plan that I conceived. However, after changing to an FI mindset years ago, I have learned that when opportunities do happen to arise, take a moment to leverage those opportunities to my advantage. The old me would have just immediately scheduled the next appointments and paid out of pocket without a second thought of “Is there something that I can do to make this financially better?”
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u2014 Ron
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