I want to retire early, but...?

The ROTH is tax free forever only the first 5 years is a problem if you take your profits. So max that every year first, max your 401K and put the rest in your taxable investment account. When you retire roll your 401K to a IRA if you are under 55, not if you are over 55. Then from 50-59.5 live on your taxable investments and a little from the ROTH if needed saving your IRA for your older age. Go to the early retirement forum to find like minded your people. http://www.early-retirement.org/forums/f28/

There is a thing with 401K if you work to 55 you can avoid the penalty so if you can find a job at 54 and roll in your old 401K you can retire later and not be penalized. Retiring at 50 might mean 45 years or more of retirement so don't spend it all the first 10 years.

If you are going to retire at 50, but live for at least 10 more years after that, then it's best to have a Roth. As long as you leave the money in the Roth until you are 59 1/2, you don't have to pay tax on the money in the Roth, even if you retired at age 50.

You can retire at any time. You don't have to pay tax on the money in the Roth just because of the age at which you retired. As long as the money stays in the Roth until you are 59 1/2, it's not taxed.

If you are going to die before you are 59, then it's best not to have a Roth or a 401K.

It all depends on your current marginal tax rate. If you're paying 38% marginal right now you're best off getting a traditional IRA, since chances are you will be withdrawing at a lower marginal rate than you currently pay. If you're at 10% jam it in a Roth IRA.

401(k) is the best choice up to the point where your employer stops matching. After that, it's really interchangeable with an IRA. More money to shelter from taxes.

Roth IRA has lot of flexibility than regular IRA. For Roth funds grow tax free, Regular IRA, you can save money now and pay taxes after retirement. If you want to use with draw funds before 59 1/2 you may need to pay 10% penalty and taxes. After 59 and half All the money from Roth IRA is tax free. If you are savvy investor you might as well save in Roth IRA. However you can not take money without penalty, in ROth you can withdraw original contribution at any time.

401k is another tax differed vehicle where you can save $17500 per year (inflation adjusted) from you pay check. Most employer provide few funds in the plan usually pathetic ones so you can diversify your money. Thats why many employees save only upto employer match and invest the funds on their own at a trading account.

If you want to retire by 50, you should save money and invest in your own account and buy value stocks for long-term, there by you can realize long term gains usually taxed at lower rate than short term investments.

Good luck !.

So, you plan to retire at 50. That's great. What do you plan to live on?

If you max out your 401K, that's $17,500 a year. If you can max out a traditional IRA, that's another $5500. Is that half your income now?

IF you want to retire early, you'll need more money than just the IRA anyway.

50 will be awfully young age to be trying to plan on retiring at when you might live to be in your 90 at your old age in your FUTURE time for this purpose BUT this is your game plan so go for it at this time.

Hope that you find the above enclosed information useful. 10/18/2014