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And your financial situation is, for many people, tied to your age because pensions, 401(k)s/IRAs and the like offer tax exemptions that are conditional upon wa
by kyllo 14y ago
And your financial situation is, for many people, tied to your age because pensions, 401(k)s/IRAs and the like offer tax exemptions that are conditional upon waiting until you hit a certain age before collecting distributions. If you withdraw early from a retirement account, you face something like a 10% haircut in addition to the income taxes. If your money is outside of such a tax shelter, well then you just need more of it to retire because you have to pay income tax plus capital gains tax.
- gknoy 14y agoI think his point was that, for at least some of the readers here, the goal of "retire early" means that one has enough wealth that even without tax breaks, one has the resources to live or work or play as you see fit -- whether that means continuing to start new companies, or raising llamas.
- kyllo 14y agoI know what his point was. I was just pointing out that when you retire, for most people, does have something to do with your age and with the government, because the government offers tax shelters that are tied to your age, and these are what most people use to fund their retirement. Of course if you're rich enough, you can just pay the taxes and still be rich enough. But that's a circular argument. The point is, the bar for "rich enough to retire" is much higher the younger you are--and not just because you have more years of life ahead of you, but also because of the taxes.