8 Key Retirement MilestonesFebruary 09, 2016
There are at least 8 important milestones you should keep in mind as you approach retirement.
There are a number of milestones that retirement-age individuals, and those nearing retirement age will want to make note of. There are significant opportunities available to make the most of your retirement, and it all depends on timing things around certain milestones.
When you reach age…
50: Catch-up contributions- In the year you turn 50, you qualify for annual “catch-up” contributions. The annual contribution limits increase for 401(k), 403(b), 457, or IRA plans. An additional $6,000 is allowed to be contributed to all three for 2016. An extra $1,000 is allowed for IRAs.
59 ½: Withdraw retirement funds- When you reach age 59 ½, you are able to withdraw money from IRAs, 401(k)s, pensions, and tax deferred annuities without being subject to the 10% early withdrawal penalty.
60: Meet with your financial advisor BEFORE your 60th birthday! Experts suggest setting up a meeting with your financial advisor before you turn 60 to review your plans for retirement so that he/she can suggest ways you might improve your existing strategy.
62: Start receiving social security benefits- You have the option to start receiving social security benefits once you turn 62, based on your work history or your spouse’s work history. It pays to look at your health and family history before doing this, however. If you can wait until full retirement age before taking social security benefits, do so—benefits increase for each month you delay receiving social security.
65: Apply for Medicare It is a good idea to apply for Medicare three months before your 65th birthday. You will already be covered by Medicare if you have elected to start receiving early social security benefits before full retirement age. You will have the chance to enroll in Medicare Part A, Part B, Part D and Medigap which all feature their own benefits and perks. Visit Medicare.gov for more information.
66 ½: If you were born in 1957, you are eligible for 100% of your social security benefits when you reach age 66 ½.
67: If you were born 1960 or later, you are only eligible for full social security benefits when you reach age 67.
70 ½ : Take required minimum distributions (RMDs)- If you don’t withdraw from your traditional IRA or qualified retirement plan by the time you reach age 70 ½, you will end up owing a penalty equal to 50% of the minimum amount you should have taken out.
There are many upsides to retirement as we all know, but ensuring that your “golden years” are indeed golden depends on careful planning and attention to these important milestones. Contact us for guidance on your particular situation.