On the FIRE Movement
Financial Independence Retire Early
Hey there!
I almost didn’t write this one. This past week has been crazy…
I’ve recently been spending a ton of time researching the personal finance space. Have you ever heard of the FIRE movement? FIRE stands for Financial Independence Retire Early. The crux of the movement is to save aggressively when you are younger, so you can retire early and live off of your investments. Seems like a pretty good deal to me.
Ever since I’ve heard of FIRE, I’ve become obsessed with the idea of financial freedom. Here are some of my favorite resources to learn more about the movement.
As I dig into this community, a common piece of advice is to max out your 401(k). The thing is, you can’t access your 401(k) until you turn 59 1/2. So, if you want to retire early (earlier than 59 1/2), does it make sense to stash your money away in a vehicle that you cannot touch until the standard retirement age?
It does. Want to know why?
There are ways to access this money early; without fees or penalties.
First, you can leverage the Roth Conversion Ladder. This is a strategy where you transfer your 401(k) to an IRA, wait 5 years, and then you can access your cash.
Second, you can leverage Rule 72(t). This is a strategy where you are paid SEPPs (standard equal periodic payments). More on that here.
I have a while until I am planning on touching my 401(k), but it’s nice to know that there are strategies (as of now) to access that money early.
If you’re interested in learning more about the FIRE movement, I am working on putting together a super-secret FIRE roadmap. It’ll teach you how to achieve financial independence in 5 simple steps. It’s in the works, and I am not sure when it’s going to come out, but if you are interested, reply to this email saying “hey, I want it!” I’ll know what you are talking about.
As always, thanks so much for reading!
See ya next week,
Austin