We have $ 1.6 million, but most of it is locked into our 401 (k) plans. How can we retire early without paying so much in taxes?

I am trying to find a way to retire in the next two or three years and I need help. I will be 54 this summer and my wife 48. Between the two of us we make about $ 210,000 a year. We currently have about $ 1.6 million saved with $ 680,000 in my former employer’s 401 (k), $ 300,000 in my wife’s former employer’s 401 (k), $ 600,000 in my current employer’s 401 (k), and $ 75,000 in various shares that we have. I currently contribute approximately $ 25,000 to my 401 (k) each year, which includes my employer contribution.

We have a vacation home worth $ 225,000 that is paid for and we have a net worth of approximately $ 250,000 in our current home. We have two sons in college at the moment, but that will be done starting next year. I feel like we can live pretty cheap, for around $ 70,000- $ 80,000 every year, but we want to travel a lot in an RV once we retire and we want to do this while we can still enjoy the outdoor lifestyle. We will either reduce it to a house, probably the vacation home, or we will sell both and move / build elsewhere. But we would make sure to live in the vacation home for two years to avoid paying profit on the sale of it. I feel like we have enough savings and it will continue to grow for the next two to three years before we decide to quit, but the challenge is how to get the money as everything is in 401 (k) plans right now. We could fund a year of retirement just by selling the shares we own, but we would still need to fund at least another year before I could access my 401 (k) at age 59 1/2. Is it worth paying the 10% penalty for early withdrawals instead of paying taxes and converting a large number of old 401 (k) plans to a Roth plan? My company allows withdrawals through the rule of 55, but you have to withdraw all of them and I know I do not want that tax obligation. Any help or advice would be appreciated. Thanks! Check out the MarketWatch column “Retirement Hacks” for practical tips for your own retirement savings journey. Dear Reader, Congratulations on accumulating such large savings. He mentions an interesting dilemma that some retirement savers may not think about, which is having your retirement assets stored in investment portfolios intended to be used later in life. Employer-sponsored retirement accounts, like 401 (k) plans, are a great tool for investing for retirement because they’re tax-deferred, which means you grow more money until it’s time to withdraw. They also have a higher annual contribution limit than some other tax-advantaged portfolios, such as individual retirement accounts. But, as you are experimenting, the money can be difficult to withdraw for those looking to retire before age 59½, as they will face a 10% penalty in addition to the taxes they will owe at the time of distribution. Fear not, there are ways to fix this problem, financial advisers said. The first task is to check your company’s policy for the 55-year-old rule (for readers unfamiliar with this rule, it allows people 55 and older who were separated from their jobs, either because they were fired or voluntarily abandoned, to take advantage of their current employer’s 401 (k) before the required age 59 ½). Companies may have their own stipulations on this rule, but an “all or nothing” policy seems rare, said Henry Hoang, founder of Bright Wealth Advisors. If it really isn’t possible, there is option 72