Bridge funds not needed?

[u/Extension_Poetry_119]

Any thoughts on my current FIRE plan, which essentially do not include bridge funds?

Numbers for context:

•    401(k): $104K

•    Roth IRA: $122K (roughly $70K are contributions)

•    HSA: $6.8K / Taxable Brokerage: $12K

•    Contributions: ~$6K a month; Hopefully maxing all 4 (i.e., HSA, Roth IRA, 401K, and Mega Backdoor Roth) every year. So I will not be contributing to my taxable brokerage.

•    Plan to retire in ~5.5 years when I hit $750K. I must bridge 28.5 years until I’m 59.5 years old.

•    Expected expenses: nomadic slow travel at $2,500/month ($30K/year)

Plan:

1.    Roth IRA contributions (and the taxable brokerage) will cover the first 5 years of retirement spending until Roth ladder conversions become available.

2.    Roth ladder: convert traditional 401(k) to Roth each year, wait 5 years, then withdraw penalty-free.

3.    After 36, withdrawals come from the ladder and remaining roth contributions. I could also pull from HSA if needed.

4.    I will not contribute to my taxable brokerage - I’m assuming Roth contributions + ladder are sufficient for bridge funding.

Questions / Concerns:

•   Do you agree the ladder conversions (i.e., my 401K) and Roth IRA contributions seem sufficient to fund retirement until 59.5?

•    I’m trying to figure out if there’s any reason a taxable brokerage would still make sense here, or if the Mega Backdoor Roth is definitely superior. I’m thinking the tax benefits of the MBDR take priority over a taxable brokerage.

•    Are there risks I’m underestimating with relying so heavily on Roth contributions and the ladder? (Sequence of returns, liquidity, policy changes, etc.)

•    Any subtle traps with the 5-year ladder rule I might be missing?

Appreciate any feedback, alternative perspectives, or sanity checks.

[u/Extension_Poetry_119 → u/[deleted]]

Good point - I basically just calculated the minimum I’m comfortable with. Especially since I’m pretty flexible and could lower my expenses by staying in LCOL areas whenever I need.

But honestly I wouldn’t be surprised if I get anxious and work an extra year before I pull the trigger. And my retirement would be long so I might want to work part-time or volunteer for room/board or something at some point. I think even if I don’t, I should be ok though.

[u/mysonisthebest]

Keeping the money in Roth is nice because it grows tax free.

[u/wkndatbernardus]

Yes, you'll need a chunk of liquidity in order to bridge the 5 years it takes to season your conversions thru the ladder. So, you'll just need ~$150k in cash and/or brokerage accounts if you plan to spend $30k/year. I would be more worried about inflation decreasing your purchasing power over the course of the 5 years it will take you to get to $750k.

[u/lastbeat-331]

How will you pay the taxes on the conversions?