Help Me Retire: I want to leave my job and tap into my $2.1 million 401(k) plan at age 55 — should anything stop me?

by | Aug 23, 2023 | Stock Market

Dear MarketWatch: I am a current federal employee/IT manager and just don’t want the stress and headaches of that type of work anymore. If I leave in January 2024 — the year I turn 55 — I will have 26 years of service and would get 26% of my salary starting in five years as a pension (pension would start at $44,000 and I would get COLAs every year). My wife will continue to work as a teacher while I find something else to do. I plan to use the Rule of 55 to break open my 401(k) — a $2.1 million nest egg — to pay the bills.  

We have another retirement account, an IRA, that is $250,000. We owe about $150,000 on a house worth $600,000. Finally, we have three kids with one done, one in and one getting ready for college. We saved enough in 529s to almost fully fund college costs. Any reason not to retire/leave and find something that will make me happier? I feel that my 401(k) balance gives me some options that many people do not have.  See: I’m 49, have $1.2 million in savings and just lost my job — can I trust the retirement calculators that tell me it’s OK to retire? Dear reader,  Before you do anything — anything at all — run the numbers. You’re absolutely right in that your 401(k) balance gives you options many others do not have, but that doesn’t mean you should tap into it if you …

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[mwai_chat context=”Let’s have a discussion about this article:nnDear MarketWatch: I am a current federal employee/IT manager and just don’t want the stress and headaches of that type of work anymore. If I leave in January 2024 — the year I turn 55 — I will have 26 years of service and would get 26% of my salary starting in five years as a pension (pension would start at $44,000 and I would get COLAs every year). My wife will continue to work as a teacher while I find something else to do. I plan to use the Rule of 55 to break open my 401(k) — a $2.1 million nest egg — to pay the bills.  

We have another retirement account, an IRA, that is $250,000. We owe about $150,000 on a house worth $600,000. Finally, we have three kids with one done, one in and one getting ready for college. We saved enough in 529s to almost fully fund college costs. Any reason not to retire/leave and find something that will make me happier? I feel that my 401(k) balance gives me some options that many people do not have.  See: I’m 49, have $1.2 million in savings and just lost my job — can I trust the retirement calculators that tell me it’s OK to retire? Dear reader,  Before you do anything — anything at all — run the numbers. You’re absolutely right in that your 401(k) balance gives you options many others do not have, but that doesn’t mean you should tap into it if you …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]

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