I got some money saved up for retirement, I'm currently in a two program to become an respiratory therapist, they make around 70-90K where I live. I was planning on living off my retirement for 3 years and getting a small short hour job on the side (for health insurance) while I pass the program in 2 years and look for full time RT job for a max of 1 year (from what I hear, it's a year tops to get one.)
So I would love if someone with some financial expertise to double check my math for me, and don't roast me to hard if it's wrong, I'm trying to figure out my options here.
My annual budget is around 30,000.
Got 400,000 K in my 401K.
I plan to take out 39,000 once a year for 3 years.
When I take it out, it's 20% for taxes and a 10% penalty fee (early withdrawal, I'm not 60) for a total of 30% I lose upon early withdrawal.
That leaves me with taking home 27,300, plus an additional 5,000 from my short hour side job, leaving 32,300 for the year.
State tax rate is 6%, the fed rate is 12% for a total of 18% on taxes.
Since I have to file what I initially took out of my 401K as my annual income (40,000) plus 5,000 so we got an annual income of 44,000 that I pay 18% taxes, which I believe is 7,920 a year.
Now for the money remaining in my 401K. It's still in the market and the average rate of annual return is 11%, but just to be safe we'll say it's 7%. I calculate my 401K loss to be as follows.
Year 1:
400,000 - 39,000 = 361,000
361,000 x .08 = 28,880
28,880 + 361,000 = 389,880
389,880 end of year 1
Year 2
389,880 - 39,000 = 350,880
350,880 x .08 = 28,070.40
28070.40 + 350,880 = 378,950.40
378,950.40 end of year 2
Year 3
378,950.40 - 39,000 = 339,950.40
339,950.40 X .08 = 27,196.03
339,950.40 + 27,196.03 = 367,146.43
367,146.43 end of year 3
So I would love if someone with some financial expertise to double check my math for me, and don't roast me to hard if it's wrong, I'm trying to figure out my options here.
My annual budget is around 30,000.
Got 400,000 K in my 401K.
I plan to take out 39,000 once a year for 3 years.
When I take it out, it's 20% for taxes and a 10% penalty fee (early withdrawal, I'm not 60) for a total of 30% I lose upon early withdrawal.
That leaves me with taking home 27,300, plus an additional 5,000 from my short hour side job, leaving 32,300 for the year.
State tax rate is 6%, the fed rate is 12% for a total of 18% on taxes.
Since I have to file what I initially took out of my 401K as my annual income (40,000) plus 5,000 so we got an annual income of 44,000 that I pay 18% taxes, which I believe is 7,920 a year.
Now for the money remaining in my 401K. It's still in the market and the average rate of annual return is 11%, but just to be safe we'll say it's 7%. I calculate my 401K loss to be as follows.
Year 1:
400,000 - 39,000 = 361,000
361,000 x .08 = 28,880
28,880 + 361,000 = 389,880
389,880 end of year 1
Year 2
389,880 - 39,000 = 350,880
350,880 x .08 = 28,070.40
28070.40 + 350,880 = 378,950.40
378,950.40 end of year 2
Year 3
378,950.40 - 39,000 = 339,950.40
339,950.40 X .08 = 27,196.03
339,950.40 + 27,196.03 = 367,146.43
367,146.43 end of year 3