Hankering to leave the 9-to-5 as soon as possible? Some people do it, but what’s the secret? Mari Adam, CFP® talked to Hillary Hoffower of Business Insider about how to make that nest egg last. Where you live can have a huge impact, so you’ll want to gravitate to locales offering a lower cost of living (that’s why retiring early in Manhattan is something of a stretch!).
Give a thought to taxes, as well, said Mari. “If all your money is in IRAs and 401(k)s, not only will you pay state and federal income tax when you take it out to pay your bills — after all, it has never been taxed — but you may also pay a 10% penalty for premature withdrawals (under age 59 1/2).” So as you save, try to sock money away in Roth IRAs and non-retirement accounts. That way it will be available to you without additional taxes when you retire. (Read the full article here)