Turns out there's lots
of ways that you're able to get money
to cover that time before you turn 59
and a half is the number for most retirement accounts.
Gotcha.
And that scares a lot of people itself.
Most people think that they cannot touch their money
until they're 59 and a half.
So how can you retire early?
So I did three things.
One of them was that I just opened up
an old fashioned brokerage account,
meaning that I didn't get any type
of retirement tax advantages,
but then there's no age requirements.
Okay, so once I started maxing out,
yeah, once I started maxing up my accounts,
you know I had to put the money somewhere.
You only get so much of this,
you know tax advantaged money.
Right, right, right.
So, yeah.
So the other thing that I did was a Roth IRA.
Some people don't know this,
but the contributions that you put into an IRA
or a Roth IRA,
you, that money,
you already paid taxes on it.
So the money that you put in,
you don't have to pay,
you can take money out without paying taxes or penalty
at any age for anything.
And just remember that this is the money that you put
in the contributions,
not the growth.
So I can pull that money out.
Those contributions out anytime I want
if I need extra money to live on.
And then you mentioned a health savings account,
an HSA.
I was on a plan while I was working
that allowed me to contribute to this.
So I not only contributed,
I didn't let the cash
and let the money just sit there.
I also had that investing and working
for me- Oh wow.
So now that I'm retired.
Yeah, any,
any health expenses I have.
Everything from aspirin to doctor's visits,
or any other out of pocket expenses,
I can pull from that health savings account.
I don't have to rely on other funds.
I've got that sort of- That's fantastic
Health savings account,
set up, ready to go.
It's great advice, ah.
Where have you been on my adult life?
I'm here now.
Now what about folks that are,
are on the other end?
We talked about trying to get young people involved.
What if you are someone who's working
so hard and you find yourself
in your late forties
or even your fifties,
and you haven't done this.
You know,
whether it was debt or you just feel like life got away
from you and you're starting too late.
Help us,
help us.
How can we help those folks?
Well, first of all,
it is never,
never too late, okay.
These things aren't taught in school.
So most of us don't even know that.
And you're lucky if you have people
around you that are teaching you these things.
So many of us are in our forties and fifties
and just now learning about it,
but it's never too late.
And there's a few,
actually some extra catch up things that you can do
when you turn 50.
There, you can put extra money in a 401k
called the catch up contribution
and in your IRA.
So for a 401k,
the limit for 2022 is $20,500.
You can put in an extra $6,500.
And then for an IRA,
you can put in an extra thousand dollars a month
and even a health savings accounts,
you can do a catch up contribution at 55.
Wow.
So let's go.
Yeah, so you wanna do a little math?
let's do a little math, okay.
So if at 50,
more than likely you are
at your peak earning years,
the kids are out of the house and a lot
of your debt may be paid off.
So you may be in a much better financial position
at 50- Yes.
Than you were at 25, right?
So if you take what I just mentioned,
max out your 401k with the catch up contribution,
max out your IRA with your catch up contributions,
altogether that comes at $34,000.
But if you were able to do that
and you got a 6% return you know,
just using that target date retirement fund
that you matched yourself up with,
you'd have a million dollars,
A million bucks. In a compressed period.
Yeah, and,
this is retiring at 67 you know
when most people retire or somewhere around that age.
So we're looking at,
you know that was only a 17 year time horizon.
So you can do some adjustments around there,
but look at all you did just starting at age 50.
And even if you were half that,
you're still doing pretty great.
(magical music)