As we achieve different ages, there are opportunities to plan our finances based on legislated laws. Be aware of the following ages and what to do for each attained age:
- Age 50 - this is the age at which you can start to make catch-up contributions that are over and above the regular contributions you are allowed to make in your 401k, IRA, SIMPLE IRA, Roth IRA, or SEP IRA.
- Age 55 - you are able to take money out of your 401k without a 10% early withdrawal penalty. There will be taxes owed, but no 10% penalty.
- Age 59 1/2 - you are now eligible to take distributions from IRAs without a 10% early withdrawal penalty. There will be taxes owed, but no 10% penalty.
- Age 62 - you are eligible for Social Security retirement benefits. You can start now, but your benefit will be reduced compared to if you wait. How much it is reduced depends on the year you were born. For instance, those born in 1960 or later would receive 70% of the full benefit at age 62
- Age 65 - You have seven months to enroll for Medicare, starting three months before your 65th birthday
- Age 70 - this is the maximum age for delaying Social Security. You will collect the maximum benefit. If you are not ready to retire, you can still receive the benefits, but you’ll pay Social Security and payroll taxes on your earned income
- Age 70 1/2 - You generally must begin to take required minimum distributions from your tax-deferred retirement accounts by April 1 of the year after you turn 70½. Some exceptions apply. Please consult with your tax and legal advisors.
If you are coming up on any of these ages and need to discuss your options, please feel free to reach out to me. I'm here to help. If you are willing, please pass this blog post along to your friends and family.