Early retirement: turning savings into income
FIRE – financial independence, retire early – means living off savings years before the usual retirement age. Two questions dominate: how much can I take each year, and from which accounts?
Withdrawals versus income
Some plan to sell investments each year; others prefer investments that pay income so they sell less in bad markets. Most use a mix.
Account access before 59½
Withdrawals from 401(k)s and IRAs before 59½ usually face a 10% additional tax, with IRS exceptions. Taxable accounts often fund the early years – where after-tax yield matters most. IncomeGrid ranks every item by yield after tax for where you live: federal, state and each investment type (Treasuries, municipal bonds, corporate bonds, funds, REITs and filed offerings are each taxed differently).
Explore income options
IncomeGrid has 40,000+ investment options screened, with risk levels 1–5 and example portfolios.
Sources
- IRS – Retirement topics: required minimum distributions
- IRS – Rollovers of retirement plan distributions
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