As we get older, we usually aren’t as excited for birthdays to come around. But when it comes to retirement planning, there are some milestones you’ll want to be aware of.
The big 5-0 is the unofficial kick-off to retirement. We get a bit more serious about retirement and the government gives you a boost to help you save more. At 50 you are allowed to participate in catch-up contributions that allow you to save more in your retirement accounts.
Age 55 and 59 ½
Individuals that leave a job with a 401(k) at 55 or later can take money out of that retirement account without the 10% penalty. But this only applies to the job you are leaving.
This is in contrast to when you can take money out of most accounts at age 59 ½. Once you turn 59 ½ you won’t need to worry about that 10% penalty at all.
Hooray, you can start Social Security! But should you? The longer you wait to take Social Security, the larger your benefit will be. For most people, if you have other options for income, you’ll probably want to wait.
You have to file for Medicare at age 65. That’s the general rule, but there are some exceptions to that. It’s also a lifetime penalty if you don’t do it. If you have a company plan though you fit the exception to not file right at 65.
With each of these ages comes new nuances that will impact your retirement plan. Working with an advisor can keep you up to date on legal changes as well as the important nuances you need to know about.
Listen to the entire episode or skip ahead using the timestamps below.
[0:23] – Wonky weather!
[1:21] – Age 50
[3:42] – Age 55
[5:47] – Age 59 ½
[6:50] – Age 62
[9:06] – Age 65
[12:44] – Age 66 or 67
[14:42] – Age 70
[15:49] – Age 72
A Quotable Moment:
“You have to file for Medicare at age 65. That’s the general rule, but there are some exceptions to that… It is a lifetime penalty.”