Weekend Reading: 6 Secret Sources of Income for Early Retirees

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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Weekend Reading

If your retirement goal is to step away from full-time work in your 50s or even earlier, the most important step is ensuring you have a paycheck replacement.


A Job Optional life is possible prior to being eligible for Social Security or if you’re too young to withdraw from retirement accounts, but it might require considering other income strategies to supplement your taxable accounts, including:

📌 Withdrawals from a 401(k) plan using the “rule of 55”: To avoid a 10 percent penalty fee for accessing savings in a 401(k), 403(a) or 403(b) prior to age 59 ½, you can utilize the “rule of 55”. It waives the penalty if you lose or leave your job during the calendar year you turn 55 or older, but withdrawals are still taxed.

📌 Payments from retirement accounts using SEPPs: Substantially equal periodic payments (SEPPs) are equal payment options from a 401(k) or IRA “that you must take for at least five years or until you turn 59 ½.” However, this strategy offers no flexibility.

📌 Withdrawals from an HSA: This strategy is often set in place decades before you expect to retire. You make annual contributions to your HSA, but let that money compound instead of using it to pay for health expenses. In retirement, it can be accessed tax-free.

📌 Contributions to your Roth IRA, regardless of age: While earnings cannot be accessed penalty-free from a Roth IRA, you can withdraw previously-made contributions tax-free at any time.

📌 Withdrawals from any retirement account, if you are willing to pay the penalty: If you need urgent cash, you can withdraw from retirement accounts at any time, but will owe penalties based on the amount you withdraw, plus taxes.

Partner with a professional: You may have more income options than you realize. Retirement planning is complicated and going it alone might mean missing out on BIG opportunities that could change your life.