4) Invest In Your Health
Paying for healthcare is a big concern for those who retire early. Medicare doesn’t kick in until you hit that golden age, so those who retire early are faced with the problem of paying for healthcare during the gap period. The remedy to this problem is to invest in a Roth IRA. Contributions to this fund are made from taxed earned income. By doing this, the money in the Roth IRA becomes tax-free, including the principal balance and the earnings. The IRS can’t touch it since you’ve already paid tax on that money. There’s also no penalty for taking money out of this account. So, if you need to pay a hefty healthcare bill, withdraw the money from your IRA at any time, in any amount. The same logic can be applied to other lump sum payments you may need to make like loan repayment and back taxes.
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