How Much Taxable Do I Need?
Calculate exactly how much you need in your taxable brokerage account to fund the gap between your retirement date and age 59½ — when your IRA and 401k become fully accessible.
Why the Taxable Account Is the Key to Early Retirement
Most retirement savers keep the majority of their wealth in tax-deferred accounts — 401(k)s and IRAs. These accounts come with a significant restriction: withdraw before age 59½ and you owe a 10% early withdrawal penalty on top of ordinary income tax.
For early retirees, this creates the bridge problem. If you retire at 52, you have 7.5 years before your retirement accounts become fully accessible. You need another source of income to cover those years — and the taxable brokerage account is the cleanest solution. No contribution limits, no withdrawal restrictions, no penalty of any kind.
This calculator tells you exactly how large that taxable account needs to be, accounting for your Roth contributions (also penalty-free), any part-time income during the bridge years, and a 15% buffer for market volatility and unexpected expenses.
What If My Taxable Account Falls Short?
A taxable shortfall doesn't mean you can't retire early — it means you need a plan. The most common solutions are building more taxable savings before retirement, starting a Roth conversion ladder 5 years before your target retirement date, using a 72(t) SEPP arrangement for penalty-free IRA access, or a combination of all three.
The Roth conversion ladder is particularly powerful: converting IRA funds to Roth today means those converted amounts become accessible penalty-free in 5 years, effectively extending your bridge without needing more taxable savings. See the Roth Conversion Ladder Calculator to model this.