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Birthday Reminders: 8 Important Milestones to Remember as You Prepare for Retirement

UpdateD JANUARY 18, 2023

As they age, most people look forward to retirement and the additional time it affords for travel, hobbies, and family. It is, of course, a very personal decision, one that is sometimes forced upon us by health or economic circumstances beyond our control. As this Wall Street Journal article published in 2019 illustrated ("The Case Against Early Retirement"), there might be some arguments against retiring early as well. No matter when you decide to stop or phase-out of work, there are some important milestones to remember and plan for:

Age 50: In the calendar year you turn 50, you can make annual catch-up contributions to your retirement account. For 2023, the amount is $7,500 (on top of the $22,500 limit for deferrals) to a 401(k), 403(b), or 457(b). Simple IRAs or Simple 401(k) allow for an additional $3,500 on top of the $15,500 maximum contribution. IRAs allow people age 50 or over to add another $1,000 on top of the $6,500 maximum contribution in 2023.

Age 55: Some 401(k) plans allow for penalty-free withdrawals if you retire early but not before you turn 55. The assets must be left in your employer's 401(k) to qualify for this provision.

Age 59 1/2: Beginning at this age, you can make penalty-free withdrawals from your IRA accounts (including IRA Rollovers from previous employers). Generally speaking, you’ll still be prevented from making withdrawals from the 401k account of a current employer if you’re still working (check with your HR dept).  

Age 62: This is the earliest date to receive retirement benefits from the Social Security Administration (SSA). You'll need to apply four months before receiving the 1st check. Unless you have health or other issues that could affect your life expectancy, it is typically advisable to wait until you're older as annual benefits increase with age. Check your benefits a few months before by going to the SSA website and look for errors on your most recent statement. We also highly recommend that you talk to us first to evaluate your options based on your overall situation (for instance, claiming benefits early can have negative tax consequences for your investment income).

Age 65: Whether you decide to retire or not, you need to enroll in Medicare when you become eligible (3 months before you turn 65). Depending on whether you're retired or not, you'll need to decide on your coverage method (Original or Advantage), Part B (outpatient and doctors' services), Part C (Medigap covers what A & B don't), and Part D (prescription drug). You mustn't miss the enrollment window as late sign-ups will trigger penalties that continue for life!

Age 66-67: You're eligible for full retirement benefits from SSA at age 66 if you were born before 1954. The eligibility increases by two months every year until age 67 if you were born in 1960 or after. Again, we recommend that you talk to us first to evaluate your options since it still might be advantageous to wait to claim your benefits

Age 70: You're eligible for maximum retirement benefits from SSA. Depending on your situation, it might make sense to hold off receiving benefits until that age.

Age 73: You're now required to take your minimum distributions from your tax-deferred accounts (except from your employer's plan if you're still working).

Are You Nearing Retirement & Need a 2nd Opinion?

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