Accessing Retirement Accounts Early | Roth IRA Conversion Ladder Explained | Early Retirement Hack

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Our Rich Journey - Accessing Retirement Accounts Early | Roth IRA Conversion Ladder Explained | Early Retirement Hack: If you watch our videos, you know that we are close to financial independence. Part of the reason for that is because we max out our retirement accounts. Once we reach financial independence, we’ll have the option of retiring early. But, traditional retirement is designed to allow people to retire at 59.5 (or later). This is because people typically can’t withdraw from their 401ks and Traditional IRAs early without paying a penalty. So, what about people who want to retire early and need to access their retirement accounts? Is there a way to access these accounts penalty-free? Quick answer - Yes! More elaborate answer - check out the video! :)
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[@OurRichJourney]

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[@mr.matt5minutesoffinance785]

You two drop more nuggets than the gold rush of 1849! Thank you again for another well thought, well executed video.

[@OurRichJourney]

LOL! You are so kind. Thank you so much! We're so glad you're finding the information helpful.

[@KO-wu2og]

IKR?! Helping to balance the inequality of economic information!

[@epi965]

Good info ! Also even if you are not planning on moving your 401k to a Roth IRA - my CPA advised me to put the max of $6000 to my Traditional IRA and then roll it to a Roth IRA. The advantage is my money grows tax free.

[@mylescooperTV]

This is the best explanation of this strategy that I've seen on KZbin.

[@OurRichJourney]

WOW! Thank you so much!

[@robertdais7569]

Wow! You 2 did such an awesome job breaking the Roth conversion ladder down! The best description I've ever seen of this topic. You 2 have such a great teaching style & make these FI concepts fun, exciting and accessible to all. So glad to be part of this FI community!😁

[@OurRichJourney]

So glad you joined us! Thanks for all the comments!

[@ganeshkmurthy]

I am 13 years from retirement, learning from this channel is preparing me for it. I now know what to do 5 years prior to my retirement. Thank you!!!

[@OurRichJourney]

Thank you so much! We are so honored to be of help.

[@pdxmojo2577]

You mentioned tax consequence when the roll over occurs but its better to quantify it into "real" money. Most will pay $10,000 in taxes when rolling over $50,000 (example). That needs to be emphasized to make sure folks have the cash to do it. Love your channel & content! keep up the good work!

[@bigtoeknee11]

They will be living off saved up cash for the 5 yr conversion period, So the only taxes owed would be the 50k a year being converted with a standard deduction only they will pay taxes on about 25k which comes to only $2600 in federal taxes owed. State taxes vary..

[@kraw7272]

@@bigtoeknee11 Are you sure? It sounds like the conversion is an annual event, so 10k per year taxes owed to feds? Correct me if I'm wrong thanks.

[@bigtoeknee11]

@@kraw7272 100% sure, and yes they will owe around $2600 per year they do the 50k conversions. So they will need 50k plus 2600 every year they do conversions. When they start pulling out of there Roth at 59.5 or older 0 taxes will be owed. So that means it will be a good idea to convert around 25k a year from traditional to Roth as 0 taxes will be owed on conversions due to standard deduction for married couple.

[@barrybmw6101]

At 25K per year they will run out of time to convert it all before they die. Even at 50K a year they may not make it.

[@jonathanalvarez3875]

Wait… if they convert 50k from a trad ira to a Roth IRA without any other income, that’s $50k minus standard deduction (24k for married couples). That would mean you’re getting taxed on only $26k, in which if using 2022 tax codes, you pay 0% on the first $10k and 12% on everything between $10k and $41k. You’d owe about $2500 in taxes (2022 numbers) which is 5% out of the $50k you converted. Let me know if I am wrong please.

[@sc3737]

How do I like this video a million times?!!!! THANK YOU SO MUCH for this gold mine! May you both prosper even more!

[@reginaldpreston2600]

You are my fav youtube channel right now!!!!!

[@OurRichJourney]

WOW! You just made our day. Thank you! Thank you! Thank you!

[@greyhk2]

Please also do a video on top of this video explaining how to withdraw from your taxable investment account for living expenses during the first five years of early retirement during a Roth conversion ladder while maintaining a 0% federal capital gains tax rate.

[@OurRichJourney]

WOW! Great suggestion! We love sharing the nuts and bolts so we're glad you asked for that level of detail :-)

[@jefferypascal]

Our Rich Journey did you make that video that the guy suggested about withdrawing money from your taxable investment account? Also while you are contributing to 401k are you also contributing to Roth IRA as well?

[@nimeshpanchal7215]

I would also love to know that

[@hubster4477]

Isn't 0% capital gains tax for people making less than 40k?

[@SK-mz9pc]

I have the same question as to how to withdraw money from taxable account while waiting for the 5 years in between.

[@chintandelvadiya9430]

Lots of love from a single mom who dreamed to retire early and god sent you both angels in her life to make it true 😊 god bless you both

[@rebeccababier8315]

I am financial coach and I can say that this is the best explanation Ive seen so far.

[@nicholascherry5962]

SOOOOOOO INCREDIBLE. I've literally been searching for a free conversation with a CFP for 2 months now to figure out how I could figure out how to access my funds without the penalty @ 35. Thanks a bunch for posting this! I should do my research on joining the FIRE movement, since I'm already doing it solo lol

[@OurRichJourney]

WOW! Congrats on being only 35 and pursuing FIRE. Especially solo! But you dont have to do it alone. We are on the journey with you. So....please let us know if there is a topic you would like us to explore in a future video.

[@calissahalpern8426]

God I love this channel. You guys should really consider hosting seminars. This is information our schools should have been teaching us

[@OurRichJourney]

Thank you so much. You are so kind :-)

[@veraiskandarian4547]

I don’t think I have learned more from anyone else. Unbelievable. You two are the best.

[@lorrainefeury2194]

This explanation has made this strategy seem more realistic to do! I've always heard about this trick but it was too complicated. Most definitely adding this to my goals this year

[@bradleydosch8884]

This strategy is a total game changer! Love having this tool in the tool belt

[@josephgerhardt4828]

personally I am on a more aggressive investing journey, but i consistently am watching these amazing videos, because I am always learning something new!

[@MichaelMongillo]

Hey y’all! The maximum annual contribution for a Roth IRA is 6,000. When converting from traditional IRA to a Roth IRA does this maximum contribution not apply? Love your channel btw

[@OurRichJourney]

No, it is not counted as part of your contribution! :)

[@Randrizzt]

Love the old school Atari shirt!

[@OurRichJourney]

LOL! Thank you so much! I love my t-shirts :-)

[@BlackMarriedandDEBTFREE]

You two are the real MVPs! Wow, this is priceless information right here!

[@OurRichJourney]

Thank you so much! That really means a lot to us. Appreciate the love :-)

[@Brent.Hammer]

This is the best Roth conversion explanation I've heard. Very nicely done. Thanks, guys!!

[@OurRichJourney]

WOW! Thank you so much! That means a lot to us :-)

[@JustAGrl007]

OMG! This video was the KEY and missing step I was looking for. I’ve been trying to figure out how people have been doing this. THANK YOU!

[@jamesspitzercashout]

Hello Christina and Amon! Just so you know how much your videos have impacted me and my family. I have let you know this previously, but it bares repeating. I have made uour vids a focal point of diiscussion with my two 19 year olds. Showung them that they can start on the path so easily. They are both full time students, and both working. But working enough to start saving,. Hopefully its sinking in, LOL. But they way you both explain things, is so much better then I would, or that they would want to listen to. Thank you again!

[@OurRichJourney]

Aww thank you so much James. That really means a lot to us. Its very inspirational for us to know that :-)

[@jaythapa5961]

Thanks for the video. You guys rock. I am new to this so I had some basic questions: 1) Is there a limit per year for transferring funds from 401k to Traditional IRA? 2) Is there a limit per year for transferring funds from Traditional IRA to Roth IRA? 3) Is the tax paid on transferring Traditional IRA to Roth IRA always better than the 10% penalty?

[@OurRichJourney]

📈Looking to learn how to invest? Enroll in our Stock Market Investing Course: www.ourrichjourney.com/investingforfire 🔥Learn more about financial independence and retiring early: Enroll in our F.I.R.E. Master Class: www.ourrichjourney.com/firemasterclass ✈Want to move to Portugal? Enroll in our Moving to Portugal Course: www.ourrichjourney.com/movingtoportugal

[@Prince-pg4cp]

Love this video and thanks to both of you. Can I still have a Roth IRA opened even if my MAGI is above the Roth IRA Eligibility but use it for this 401k Conversion ladder?

[@barrybmw6101]

@@Prince-pg4cp yes. There is no conversion income limit

[@calvinraab8798]

Roth IRA is especially great for young people!

[@OurRichJourney]

YES! So many benefits when you start young :-)

[@pacificH2O]

Thanks Amon and Christina! I am a new subscriber and I really like how you make the information easy to understand for a beginner.

[@ceciliaruns72]

Your channel is by far the most informative! I appreciate all your hard work in creating the content, it is very motivating! I have a ways to go, but have set goals and believe I can make it happen! Thanks! ❤

[@OurRichJourney]

Thank you so much! And goal setting is exactly the approach to have. We set our goals years ago and also established milestones along the way so that we can measure and celebrate our progress. It may feel like your journey will be long but it will happen very fast....and we'll be here cheering you on ;-) We are so happy to be on the journey with you!

[@chrisallmand1805]

Great stuff! Question: If you have a Roth 401k, do you need to wait 5 years after rolling over to your Roth IRA?

[@zuhalterei4090]

No

[@Nephilimator]

@@zuhalterei4090 Should probably add here that you still can't access the earned income portion until 59.5. Roth 401K -> Roth IRA roll over will give you immediate access to amount contributed but not its earnings portion.

[@jaykim6734]

How much are they paying each year in taxes due to the conversion?

[@Johnsoncrna]

Thanks for breaking this down. I’ve never had a clear answer as to what the FIRE folks are doing to their hard earned retirement accounts early!

[@jamesbon1]

Thank you for this video. It answered so many questions for me. My wife and I have begun to learn tremendously from your teaching and we're inspired. God bless!

[@OurRichJourney]

Thank you James! So excited to hear that you and your wife are felling inspired! :) Thank you for watching!

[@OurRichJourney]

Please subscribe, hit the notification button, and check out some of our other videos: ▸▸▸How to Live Off Investments | Our 7 Account Strategy: kzbin.info/www/bejne/jnzYnKxji5uYhaM ▸▸▸Money Mistakes to Avoid on Your FIRE Journey: kzbin.info/www/bejne/lWe8oJeYgK-jg9E ▸▸▸OUR STOCK PORTFOLIO UPDATE | May 2019: kzbin.info/www/bejne/g6GloHieqLx4b7s ▸▸▸Best Vanguard ETFs (Exchange Traded Funds) for FIRE: kzbin.info/www/bejne/ZpawYp2Pi5WdY80 ▸▸▸Vanguard's VTSAX Index Fund: Our #1 Investment: kzbin.info/www/bejne/rWG9g56DatqmsKs

[@DanielleElizabethStevens]

Thank you! I am wondering if you have recommendations on where to open up a Roth IRA? Thank you ! 🙌🏾

[@alphahandy2021]

Christina said you must wait five years after rolling the money into the Roth before you can convert it. I was under the impression that you can withdraw the money at any point every five years. The five year clock begins when you make your “first” contribution. Meanwhile you can still make contributions as well as rollover as the years progress. So am I incorrect in my thinking that you don’t need to wait five years after a big rollover but instead 5 years after your first contribution.

[@browniestv449]

Why I had no Idea about this Strategy, Now I can contribute to 401 K and Access the money in future early! Thank you!

[@OurRichJourney]

So glad you found it useful! Thanks for watching!!!

[@dherring256]

This is beautiful. I was wondering how I am going to bridge the 15 year gap. This makes perfect sense

[@OurRichJourney]

Thank you so much. Its really an amazing strategy and why we love the Roth. So many benefits to having one :-)

[@hvyanuaria]

Can you do a how to video for a backdoor Roth IRA and a mega backdoor Roth IRA, and also explain when it would make sense to do this?

[@OurRichJourney]

YES! Great suggestion! Stay tuned...

[@colbyc1485]

@@OurRichJourney Would love to see this one too!

[@kristinblanchard8463]

Yes please do video on backdoor Roth.

[@vedeshpersaud8030]

Does this video exist? It's a been year

[@janaiwilliams1141]

One of the most important videos

[@OurRichJourney]

Thank you Janai!

[@johnray1822]

No one breaks down the information like y'all do, it really is invaluable! I started my retirement journey as self employed and started with a Roth IRA. Do you have any advice on accessing it early without penalties since there is no conversion from a 401k to a traditional? Thanks again for the videos!

[@PeterPyo]

yes i need to know this!!

[@melissaobichukwu961]

I need to know this

[@tricolutkins9888]

This video is the best thing on KZbin. I love it!

[@pedrorosario2267]

Hey guys. You've just gotten a new subscriber today! :) To my knowledge IRAs and Roth IRAs are pension plans that are only available to US residents. How do you guys manage your tax payments now that you're living in Portugal? In Portugal capital gains are taxed at 28%. Do you currently pay the 28% rate on your capital gains?

[@redshadowfist]

I love this channel and I’ve recently gotten my girlfriend to start watching too. I was confused on one point that I hope you can explain to me. Why do I need to take money from my 401 k and put it into a regular ira first? Why can’t I move it directly from the 401 k straight into the Roth? Thank you so much for your answer and these great videos!

[@OurRichJourney]

Thank you so much! And that so cool your girlfriend has joined the journey. We can tell you that two heads are better than one when pursuing FI ;-) Regarding your question, its an IRS tax rule that only allows 401Ks (pre-tax account) to be rolled over to traditional IRA (another pre-taxed account). The rules only allow traditional IRA funds to be converted to Roth IRA. There is not much explanation in the tax rules as to why you can go from a traditional IRA to a Roth IRA. Which is why its a loophole. If you want to learn more about the rule here is a link to the IRS website rules for 401k distributions: www.irs.gov/retirement-plans/plan-sponsor/401k-resource-guide-plan-sponsors-general-distribution-rules Start here and link to the other rules that govern the conversion. However, note that if your 401k is a Roth 401k, you can roll it over directly into a Roth IRA without intermediate steps or tax implications since both accounts contain after-tax money . You will need to check how the employer match money will be handled though becuase those will be in a companion regular 401(k) account. Thanks for the question!

[@redshadowfist]

Our Rich Journey thank you so much for your reply!

[@verynick]

Could you the transfer (401k to Traditional to Roth) all in one day?

[@warrendarable]

@@verynick - there’s no limit but is wise to be tax efficient per amt of the xfer

[@10XAcademy]

Great informative video ORJ! The Roth conversion ladder is a great way to access your retirement funds early using this technique you mentioned! 🙌👍💯

[@OurRichJourney]

Thank you! Its really a great strategy on so many levels.

[@stevemlejnek7073]

Great content. Knowing this is targeted to younger people on the FIRE journey, just wanted to point out for those a bit older that the 5 year rule on conversions stops once you reach age 59 1/2.

[@tillie2221]

I would love for you all to do a video on the back door Roth IRA. Wondering if doing so would get me in the realm of FIRE!!!

[@ArchieFelix]

Oh My God! I Love You Guys! Your explanations and the examples you give for every situation is Priceless! I plan on retiring next year when I turn 56 (the earliest they will let me go) I I've never been so scared until now. I'll never be as wealthy as you guys, but with a good plan in place, I can live the Dream Retirement stress free! Can't wait! Keep sharing your bright ideas and hacks! I Love It!

[@GrowthePiggyBank]

Nice video! I would add that state and local taxes may still apply depending on where you live. You should factor that into ur withdrawal amount. For instance, Pennsylvania taxes 401k upfront at 3%, can not deduct at all for income taxes. In addition, city of philly taxes income at 4%, their notorious wage tax on all taxable income. That’s already 7% not counting inflation adjustment. I imagine other tax heavy states like CA or NY are worse.

[@OurRichJourney]

Great point on taxes. Thanks for adding to the conversation!

[@viselchakforyou]

Great video and examples. It looks like you are explaining how to address the 5-year rule. What about the rule around age of 59 1/2? In our example it is still unqualified distribution and would result in a 10% penalty wouldnt it?

[@mahleta6162]

Way to break down such a complicated concept! Thank you so much! Your family is so inspiring. My family is also on the path to FIRE and a one income family as well for now (with a little one). Love your videos so much. Always get excited when a new one pops up on my feed.

[@jvaldez5]

Thank you. I just paid off my house at 35 and was wondering how I wanted to do this in 10 years. Now I know I need 5 years of expenses and then I can use year 1 money converted 5 years from now

[@OttawaMikes]

I'm never going to pay off my house. 2.8% money, that's tax deductible. It's pretty easy to beat 2.8% + tax by investing.

[@julied915]

I am 100% into this journey. Great information😀 I'm about to watch all of ur videos! Thank you for sharing your journey💛

[@georgearistotle9322]

I can’t believe I just found your channel. You guys are amazing. Appreciate all the shared knowledge. Just subscribed.

[@OurRichJourney]

We're so happy you found our channel George! Thanks for joining us!!!

[@philipnorman9364]

Your guys videos are so great! Some of the best content on KZbin in my humble opinion :)

[@babygurl748]

What if I have a Roth 401K? Can I transfer to Roth IRA, skipping the traditional and not having to pay taxes?

[@LokeshKukreja]

Thank you so much for making these videos. I find them super informative. One question I had though is why would one need to quit their job first before they can actually start to move funds from their 401(k) into their IRA followed by Roth IRA. Knowing that I have a set date five years from now when I want to retire, can’t I just start moving my money in increments now while I am still employed?

[@dheerajchidambaranathan]

Hi, I just stumbled upon your channel and it's really refreshing to see a young couple actually achieve financial freedom and live their life to the fullest. Congratulations on achieving this at such a young age! :) I had a question with respect to this rollover strategy. I have invested in a Roth 401k meaning my contributions into that account have been with after tax dollars. Can I move this to a Roth IRA directly or should I use the same ladder principle? If I do either, do I need to pay additional taxes on the investments or should I only concern myself with the earnings on top of the investments that have accrued since the original investment was already made with after tax dollars? Thank you and stay safe :)

[@Neoeclectic]

Do you have to wait until you quit your job to start rolling 401k over to a traditional?

[@rapfreak7797]

Depends on your plan but I would say close to 100% of your 401k investments won’t qualify for an in service distribution.

[@collinpedersen608]

I'm a little bit confused. If the max contribution to a roth ira per year is $6,000-7,000, how are you able to transfer that amount of money($50,000)? Also, is there any risk in this IRS rule loophole being legislated away someday? Thanks!

[@maxnguyen22]

My dad worked at Halliburton for 26 years, he had a shoulder injury, from lifting for so many years, the company nurse told him it was not a work related injury. He couldn't work anymore. He retired from them at 55. He had over 4k in bills due, He panicked pulled his 401k, too early and spent it all. paid the house and car off. needed money so he sold the new car he just bought for half what he paid. went to cash cars. tried buying selling cars, to make money and end up losing more. two years later after he healed from the injury, found another job that paid 8 dollars an hour less than what he was making. barely having any thing left. He has a great job now. He will be 61 in few weeks. He plans to retire with partial social security benefits at 62 and half. when this was all happening. I gave him the phone number and address to go to, or call so he can apply for short term disability. and don't touch the 401k!! get a credit card and roll the balance into that.......he never did. He did the opposite. Over 50k in penalties and taxes. Now I have to figure out what I can do with the 35k he has in 401k when he retires from the company he is at now. Sorry so long but its been bugging me for years. And I'm the only child that helps him financially. The BIG question is, in a few years. what can I do with his money when he retires to create a better portfolio or residual income for him?

[@chrisnewing3548]

Thank you for this great information. I will be implementing this.

[@omarkhan2158]

Love your channel Amon, Christina! Had a question, regarding the conversion. I invest majority of my income towards a Roth 401K vs the Traditional 401K. Could I just move my Roth 401K earnings directly into my Roth IRA tax/penalty free? Or do I need to open a Traditional IRA (don't have one atm), and use it as an intermediary?

[@PICTUREREADY]

You are such a blessing...love your knowledge.

[@dvdbrl566]

Conversions from a 401k to a Roth IRA trigger income tax on the converted amount, so why would you not just use a brokerage account set up for long term cap gains and withdraw less than 80k a year so that you don't trigger any tax at all? Isn't this effectively a loop? 401k----->IRA----->(tax comes in here)Roth IRA? It just negates the tax advantage of contributing to your 401k during those 5 years?

[@nancybellantoni6099]

Great info! I found out that I could access my 401k at 55 because my whole career has been at 1 place. I’m still trying to figure out healthcare costs before I stop working.

[@dwalker6868]

Thank you

[@OurRichJourney]

You are so awesome!!! ❤️

[@owennakao6840]

It would have been good to add the paying the income taxes part in the example. I assume the 50k transfer from the TIRA to RIRA is when you report it on the tax return?

[@mixnmichael1]

Move to a small village in Mexico for the first 5 years! Thanks for the info. got 3 years 5 months and I'll be 59.5!

[@samyal8r]

This is amazing, thank you so much for breaking this down

[@OttawaMikes]

The 5 year rule restriction against your conversion is satisfied if you already have ANY other Roth IRA for more then 5 years.

[@artbw3413]

Thanks for another awesome video. What's the difference of directly rolling over the 401k to a Roth IRA, VS. rolling it first to a traditional IRA, rolling it again into a Roth IRA.

[@OurRichJourney]

Great question! You can do a rollover from regular 401(k) and a Roth IRA, but it requires that you make a stop at a Traditional IRA first to avoid a huge tax bill all at once. You will eventaully pay taxes on the 401K money you move over but you can control how much you pay in taxes each year by holding money in the IRA before you convert it to the Roth and withdraw it. You will pay taxes on the money when you convert to the Roth. (The reason: You got a tax deduction for your contributions to your regular 401(k) and paid no taxes to move it to a Traditional IRA, which is also designed to hold pre-tax money.) A Roth, on the other hand, is a retirement savings plan for after-tax money. If you think your tax rate is higher now than it will be in retirement, it could be smart to roll over to a Traditional IRA. If you think your tax rate is lower now than it will be in retirement, it could be smart to roll over to a Roth IRA. Whether taxes are higher or lower depends on how much you earn and whether the government is raising or lowering taxes. (Source : www.rothira.com/401k-rollover-options ) Note that if your 401(k) is a Roth 401(k), you can roll it over directly into a Roth IRA without intermediate steps or tax implications. Both accounts contain after-tax money . You just have to check how to handle any employer matching contributions because those will be in a companion regular 401(k) account.

[@artbw3413]

@@OurRichJourney Thank you, for taking your time to explain this to me.

[@fadwahilili]

Can this strategy be used before you hit retirement age? For example, when you switch companies, you can roll your 401K savings into a traditional IRA. Can you then transfer from the traditional IRA to your Roth IRA, wait 5 years, and then use that money to invest in buying properties, etc.

[@dianaonyango5814]

I think so did that with my first job. You can either roll it to new employer 401k or Roth IRA. Chose Roth via vanguard as opposed to transamerica 401k

[@atsiat]

Mind blown! Thanks for sharing this (seemingly) well-kept secret!

[@OurRichJourney]

Thank you so much! Now the secret is out :-)

[@stacyjohnson7395]

Love you guys! Thank you for sharing your knowledge!

[@calvin40calartis41]

Wowww... This is crazy!!! Thank you!!!!

[@dailygrinders89]

Just joined the journey yall

[@OurRichJourney]

WOW! So glad to be on the journey with you ;-)

[@kennethpena6699]

Once I've completed the Roth IRA conversion can I start investing (real estate, stocks) with it right away or do I still need to wait the 5 years?

[@OurRichJourney]

Great question! You can't withdraw the money before five years without getting hit with a penalty. However, you can still invest the money in it (including real estate) as long as it stays within your ROTH and you don't withdraw it. Thanks for watching the video!

[@rand-san2095]

You forgot to mention the pro-rata rule. I would only transfer the amount of money from my 401k that I plan to convert to a Roth IRA.

[@OurRichJourney]

Thanks for adding to the video with your comment AND thanks for watching! :)

[@Anny-zk4mr]

Thanks so much for the video!! You guys are such an inspiration. I have couple questions if anyone can help with: 1. After converting the 50K (let's say) into the Roth IRA account, does that money keep growing in that 5 years period then? 2. Does Vanguard/brokerage firms keep a separate pool for "converted money" in the Roth IRA account? (aka how do they track and how is it shown so that personal investors can clearly see what's converted vs what is not, and the gains/losses that it incurred with that 50k?) 3. So let's say I started doing this process at age 40, I can take out the money at 45 penalty free. Do I still keep doing this trick until 59.5?

[@sojournerslife1587]

Very well explained! Understood!

[@OurRichJourney]

Thank you! Glad you liked the video! Thanks for watching!

[@midnightcameo5532]

WOW. I have been wondering how people retire early and get their 401k funds. this explains so much.

[@OurRichJourney]

So glad it helped! Thank you!

[@griceldacalderon6854]

Great information! 👍🏼Where were you 10 years ago!😊

[@victorcardenas4]

Good example. You just forgot to mention that when you do that when you do the convention to ROTH, you have to pay taxes on the amounts that you convert. The take out the amount that you deduct in past years in you tax returns

[@OurRichJourney]

Thanks for watching. Actually we did say that you have to pay taxes on the conversion.

[@marekryciak]

Thinking about it longer... it does not make sense to use conversion ladder if you are in Portugal under "old" NHR either (with 0%) if you are going to withdraw those funds from ROTH IRA after your NHR expires (10 years). Yes - when you convert rollover IRA into ROTH under 0% NHR - your Portuguese taxes will be 0% but as US citizen you will pay "regular" income taxes in US. Then, AFTER your NHR status in Portugal is gone you will pay taxes AGAIN. So after 10 years it is better to withdraw from traditional IRA or move to another country with better tax treatment.

[@LS-yf6vu]

What a video, so much information! I would have never known about this, if it wasn't for you guys. Could I also work those five years while waiting to take my money out of the roth ira? and should then open a 401k instead if a roth ira, since i can put more money? thank you sooo much for all your videos, i am addicted to you guys! :)

[@Lamoureuse1]

I can not thank you enough for sharing these information with us. I would like to ask for your perspective on a matter. I live in Canada now, but I know eventually I will move to Florida. I have a few individual stock on the TSX. I just finish paying off my student loan and I am debt free. Now I am looking to invest more of my money, should I pay the exchange and buy stocks on the NASDAQ, etc or continue investing on the TSX or just save my money to move and wait until I have a job in Florida to start investing? Any thoughts or ideas would be greatly appreciated. Thank you so much.

[@AlexKelley-CPA]

Thank you so much for making this video!

[@minimalmillionairemom]

You guys are rockstars! I think we’ve figured out how to get to retirement, but what do once there is a whole new story. I’ve read articles on roth conversions, your video is so helpful! My husband doesn’t have much time to read about these strategies. This video will only take a few minutes of his time. Thanks! I’m trying to figure out if I can/should start this conversion before retirement...we are about 5 years out.

[@OurRichJourney]

If you have money already in a Traditional IRA you could start now, however if you're also working/making money it may push your taxable income up to a higher tax bracket so you would pay more in taxes. If you're considering making the transfer from your current employers 401k that may not be an option while you are working there. If you can make the transfer while still employed you may face other penalties from your employer so make sure you do the research. Anyway...Congrats on only being 5 years away. That is so exciting!!!!

[@minimalmillionairemom]

Our Rich Journey Thanks for the pointers. I definitely have to look into the taxes.

[@vermont_rider]

@@OurRichJourney My wife and I are high earners right now...currently maxing out 401k contributions each year. Would this make sense to do now if we have some room before the next tax bracket? We are about 7 years out from early retirement. We plan to start adding money to Roth outside of this idea going forward but would like to get some decent money in there to use as non-income at retirement time to hopefully qualify for ACA subsidy.... if still available then. At 55 I plan to pull some income from our 401Ks under the 55 rule but keep withdrawals below the income threshold/cliff. Plan to use the Roth to bump up available funds and use HSA funds as well for health care coverage. Thank you !

[@Ms.coconut928]

Thank you so much. This is very helpful. 🙏🙂

[@savelikeaprowithleah5157]

Another great info! Thanks for sharing!

[@OurRichJourney]

Thank you so much!

[@hersheykiss722]

Great video! If you already have money in your Roth IRA (that wasn't rolled over), can you take that out, penalty free, in five years, or does that rule only apply to money that was rolled over from a traditional IRA to a Roth IRA?

[@jr2040]

You might take out the 5 year old principle but tax and 10% penalty on the gains if less than 59 1/2

[@llouvakates]

Great info guys!!! Very insightful

[@OurRichJourney]

Thank you so much :-)

[@zacharyrosen8372]

Can you skip the traditional IRA step? I have a roth option in my current 401kso if I'm using that couldn't I transfer directly to my roth IRA?

[@teesin408]

Thank you for creating this great video

[@mariaalvarez8385]

Love your videos!

[@paulvieira9191]

Great channel guys and I love what you’ve been doing with the house. I recently reached my FIRE Goal at 40! My partner and I are still working but have been splitting our time equally between the US and our flat in Valencia, Spain. We are looking to permanently relocate to Spain within the next few years. I currently have a significant 401k balance that I left with my prior employer and I’m looking to begin a ROTH IRA conversion. - Can I rollover our future annual expenses into an existing ROTH IRA (after first rolling over to Trad IRA)? - Does this impact my annual ROTH IRA max contributions? - Should I consider my tax bracket before roll over and ensure I stay below the next tax bracket threshold or just proceed with rolling over what our forecasted annual need will be?

[@dinofalcone6645]

Thank you,great information

[@amauris1522]

Hey guys I’m glad you’re doing great and with your goal almost on hand. Two questions for you 1: any tricks to introduce kids to good money use after being in a no good money use and 2 what do you think about investing in peer to peer lending platform. Thanks and keep the journey

[@OurRichJourney]

Thank you so much! Regarding your questions. #1. Check out our kids and money video. Its one of our first videos so we're a little green but if you can get past our awkwardness we have some great tips on kids and money. Here is that link: kzbin.info/www/bejne/l3i4gIBrj7SVhdk #2. We have a lending club account and its been a blah investment. We'll do a video on it in the future but in the past 3 years we've returned about 4.5%. Which is about half of what we expected based on the loans we funded. We've had several defaults which is why the account has under-performed. But you may have better performance :-) Thanks for the questions!

[@saizn9sr]

Step 1 resonates with me

[@stevenobrien595]

Hi, Fantastic content as usual. Have you ever done a video on Roth conversions in general? What a great tool to implement as part of an over all investing strategy.