The Retirement Reality Timeline
March 6th, 2019 by Jim AllenIt’s Time to Get Ready for Retirement
As you approach your mid-fifties there are some important milestones to be aware of as it pertains to getting ready for retirement. Whether it is your IRA or 401(k), Social Security, or Medicare here are some important dates you should know:
Your 50’s
50 – You are eligible to make additional “catch up” contributions to your IRA and 401(k).
55 – If you “separate from service” (leave) your employer, you can take a distribution from your 401(k) without the 10% early distribution penalty. This exception doesn’t apply to IRAs.
59 ½ – You can start taking distributions from your IRA or 401(k) without the 10% early distribution penalty tax.
Your 60’s
62 – This is the earliest age you can claim Social Security retirement benefits. Note – your benefits are reduced 25-30% for claiming early.
65 – This is the age you sign up for Medicare. Signing up late may cause you to incur a 10% penalty on your Part B premiums.
66/67 – This is the age you are eligible for full Social Security retirement benefits. The actual age depends on the year you were born. Anyone born after 1962 has age 67.
Your 70’s
70 – Waiting until age 70 gives you the maximum Social Security benefit.
70 ½ – You must start taking “required distributions” from your IRA and any employer retirement plans such as a 401(k). There is an exception for employer retirement plans if you are still working for that employer.
Getting ready for retirement requires thoughtful preparation, and using a financial professional to navigate these important dates can help you avoid any landmines and maximize your retirement income. If you would like to discuss your retirement income plan, please contact us for a complementary retirement review. �s*