Key Retirement Age Milestones
KEY RETIREMENT AGE MILESTONES
Retirement is not merely a destination; it is a journey punctuated by significant decision points that can optimize your financial well-being. So, as you navigate the journey to and through retirement, each milestone starting from the age of 50 presents unique opportunities to enhance your future. It is crucial to recognize how various age milestones can impact your financial needs for the better and help you make informed decisions.
Age 50
If you have a 401(k), 403(b), TSP or 457 plan, and you’ll be 50 by the end of the year, you can make a $7,500 catch-up contribution on top of the standard $23,500 limit.1
New for 2025: If you’re between the ages of 60-63, your retirement plan catch-up contribution is $11,250 for a total contribution of $34,750.1
If you’re 50 (or will be by the end of the year), you can make an additional $1,000 catch-up contribution to a traditional or Roth IRA.1
If you’re a public safety employee who’s 50 or older and retired, quit or got laid off, you can avoid the 10% early withdrawal tax on your employer’s retirement plan. 2 Talk with your financial professional for more information and to see if this would be an option for you.
If you are a widow or widower who was disabled within seven years of your spouse’s death, you may be eligible to draw Social Security survivor benefits. 3 If you’re still working, your benefits may be reduced or eliminated until you either reduce your earnings, retire or reach survivor’s full retirement age (FRA).
AGE 55
If you retire, quit or get laid off in the year that you are age 55 or older by Dec. 31 of the same year, you may take a distribution directly from that employer’s retirement plan without paying the 10% early withdrawal tax. Any pre-tax distributions will be taxable. If the monies are first rolled to an IRA, the age 55 exception will no longer apply.4
AGE 59½
You may take a withdrawal from an IRA, 401(k), 403(b) or other employer-sponsored retirement plan without paying the 10% early withdrawal tax. If you are still an active employee, the employer’s plan must permit an in-service non-hardship withdrawal. Pre-tax distributions are still taxable as ordinary income.
AGE 60
If you are a widow or widower (and not disabled), this is the earliest age at which you may be able to file for survivor benefits. Talk with your financial professional for more information.
AGE 62
This is the earliest age you can claim Social Security retirement or spousal benefits. Filing for benefits at age 62 could reduce your monthly retirement benefit by 25% to 30% of your benefit at full retirement age. 5 You may file online up to four months prior to your 62nd birthday by visiting www.ssa.gov. Talk with your financial professional for more information.
AGE 65
This is the age at which you generally are eligible for Medicare. Your seven-month initial enrollment period includes the three months prior to your 65th birthday, the month you turn 65, and ends three months after your birthday.
Unless a special enrollment period applies to you (e.g., if you are covered under a workplace health plan), failure to enroll in time could cause a lifelong monthly penalty to your Medicare Part B and Part D prescription drug plan.6
AGE 66-67
When you reach your full retirement age, you’ll be able to collect 100% of your Social Security benefit. Why is this important? Because you could receive a 30% higher benefit than if you decide to file at age 62.
If you were born between 1943 and 1954, your FRA is 66. If you were born between 1955 and 1959, your FRA falls somewhere between 66 and 67. And if you were born in 1960 or later, 67 is the age that you are entitled to 100% of your retirement benefit.7
AGE 70
At 70, you stop earning monthly delayed retirement credits (up to 8% per 12 months beyond your FRA, accrued monthly) on your Social Security retirement benefit. If you have not yet filed for benefits, do so now. Waiting provides no additional credits. 8
AGE 70½
Once you reach age 70½, you can reduce your taxes by directly donating up to $100,000 from an IRA to the charity of your choosing via a qualified charitable distribution.9
AGE 73
If you were born between 1951 and 1959, you must begin required minimum distributions from your traditional IRAs and workplace retirement plans (unless you are still working and have a qualified plan) by April 1 of the year following the year you reach age 73. If you wait to take your first RMD the year following your 73rd birthday, you must also take a second RMD distribution by Dec. 31 of the same calendar year.10
If you were born in 1950 or earlier, you should already be collecting required minimum distributions (RMDs) from your traditional IRA or workplace retirement plan. If you’re still working and participating in the company’s retirement plan, you may be able to delay RMDs from your current employer’s plan until you retire, if later. Check with your employer.
AGE 75
If you were born in 1960 or later, you must begin required minimum distributions from your traditional IRAs and workplace retirement plan (unless you are still working and have a qualified plan) at age 75. Those scheduled to take their first RMD can still wait until April 1 of the following calendar year to take their RMD.
WHERE TO GO FROM HERE
To see how Cornerstone can help you with financial planning and retirement portfolio, call our office today at (775)853-9033 or click here.
Based in Reno, NV, Cornerstone is for individuals and families looking to grow wealth, protect and preserve their life savings, and plan for the distribution of their estate in a tax-efficient manner through a tailored strategy. Schedule a time to discuss your financial goals with us.
©2024 Prime Capital Investment Advisors, LLC. The views and information contained herein are (1) for informational purposes only, (2) are not to be taken as a recommendation to buy or sell any investment, and (3) should not be construed or acted upon as individualized investment advice. The information contained herein was obtained from sources we believe to be reliable but is not guaranteed as to its accuracy or completeness. Investing involves risk. Investors should be prepared to bear loss, including total loss of principal. Diversification does not guarantee investment returns and does not eliminate the risk of loss. Past performance is no guarantee of comparable future results.