I enjoyed Nathan's blog post about trying to save for retirement, but also trying to make or save enough money to live the retirement lifestyle before we reach retirement.
My question now is how should we save money for pre-retirement? Most retirement savings plans have penalties if we take money out of our accounts before we reach a certain age.
If I am getting to a comfortable point in the money I have saved for retirement, what type of savings plan should I use to save money I could spend in my 50's and early 60's?
It matters how old a person is. If they are in their late 40's or 50's, a person would want to find a more conservative savings option such as CDs or money market accounts. These options would have low returns, but the money would be guaranteed to be there in a few years when it is needed.
If a person is in their 30's and they want to find some investment options with better growth potential and no fees for using the money in their 50's, then they could use any type of investment option, but they would have to realize that they will have to declare the investments and pay taxes (and fees) on them.