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Consider These Important Dates When Preparing for Retirement

May 30, 2019
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Many people think all major retirement decisions are made at age 65. In reality, there are a number of important decisions to make along the way, starting as early as age 50. What you decide can have a significant impact on the amount of income you can count on during your retirement years.

AGE 50: This is your opportunity to focus on preparing for your retirement years. During this year, you can start making catch-up contributions to a 401(k) and many other retirement financial vehicles. A catch-up contribution is an amount beyond the normal contribution limits.

AGE 55: If you leave your employer during or after age 55, you can receive amounts from that employer’s retirement arrangement (e.g., 401(k) or pension) without the additional 10 percent federal tax for early withdrawals.

AGE 59½: If you are eligible, you can take withdrawals from your retirement accounts without the additional 10 percent federal tax for early withdrawals. Of course, the more you leave in the accounts, the more they can grow tax-deferred.

AGE 60: If you are a surviving widow or widower, you can receive Social Security survivor benefits, but at a reduced rate.

AGE 62: You can now receive Social Security benefits at a reduced rate. By waiting longer, you could receive a larger monthly benefit.

AGE 65: You are eligible for Medicare on the first day of the month that you turn 65. If you do not enroll during the month you turn 65, you may be required to pay a higher premium for Medicare Part B (the health insurance portion of Medicare) if you wish to enroll later. Discuss with your tax advisor what is appropriate for your situation.

AGE 66: If you were born between 1943 and 1954, you are now at full retirement age and eligible for full Social Security benefits. By waiting longer, you could receive a larger monthly benefit due to delayed retirement credits. Spousal benefits, however, do not continue to grow after you reach full retirement age. If you were born between 1955 and 1959, your full retirement age is age 66 plus two months for each birth year after 1954.

AGE 67: If you were born in 1960 or later, you are now at full retirement age and eligible for full Social Security benefits. Remember, by waiting longer, you could receive a larger monthly benefit. Note: Spousal benefits do not continue to grow after you reach full retirement age.

AGE 70: If you have not started receiving Social Security benefits by this age, waiting longer will not increase your benefit.

AGE 70½: You need to start taking required minimum distributions (RMDs) from most retirement arrangements by this age. If you do not, you could incur significant excise taxes.