Early retirement penalty

Personal factors, your tax bracket, expected future income and when you plan on retiring all play a role. The answer isn’t as simple as playing the tax bracket game (convert be low a certain tax bracket only).

Other considerations can affect you taxes down the road. Even Medicare premiums are an issue. A high required minimum distribution (RMD)(currently starts at age 72, but pending legislation will gradually raise that to 75, if passed) can cost more than just a tax bill. It can also increase your cost for Medicare.

The best way to handle a Roth conversion discussion is to break it into two parts: the conversion phase and the retirement phase.

Retirement is the one universal goal. Some plan for a traditional retirement while others dream of cutting their own trail sooner. Early retirement is a worthy goal and achievable with a modest amount of planning.

There are 10 things to consider before you submit your resignation. If you cover each issue properly early retirement will fulfill your dreams. Poor planning could put you back into the workforce.

The map below is a handy guide for your journey. Click on the map to enlarge and print. This map, along with the information below, can have you enjoying early retirement in record time.