by Scott Nelson, Stake Finance Specialist

Retirement planning is a long-term process with key milestones along the way. When you reach certain ages, you’ll be eligible for various programs and services, and you’ll have further access to retirement planning tools. These are the key ages that mark those milestones:

1)    50

Age 50 allows for catch-up contributions to retirement accounts, increasing the annual limit for tax-advantaged savings. If you’re behind on retirement savings, being able to contribute extra each year over 50 can go a long way to get you back on track.

2)    55

Age 55 permits penalty-free withdrawals from 401(k) plans if you retire or leave your job. This is a few years earlier than the regular time for IRAs and other retirement accounts, so make sure you know your options when planning your timeline.

3)    59.5

Age 59.5 allows for penalty-free withdrawals from IRAs. This is the time you’re finally allowed to start utilizing your retirement savings accounts to fund your retirement or move money around.

4)    62

Age 62 is the earliest age to start receiving Social Security benefits, though at a reduced rate. At 62, you know you’re at least eligible for payments, and this age can be a milestone for that reason. But it’s usually considered early because claiming at ages 65, 67 (depending on when you were born), and 70 will yield you greater Social Security payments.

5)  65

Age 65 is the age most Americans will enroll in Medicare as their healthcare coverage.  Prior to your 65^th birthday you should seek advice about supplemental coverages, i.e. a Medicare Supplement or a Medicare Advantage plan to determine which will work best for you.  It does not cost any extra to get professional guidance.

6)    73 / 75

At age 73, if you haven’t reached it already, (age 75 if you were born in 1960 or later) is the age when you are required to withdraw from your retirement accounts to deplete them. You will face penalty charges if you fail to deplete the proper percentages of your retirement accounts according to the IRS rules. So, plan your retirement accounts around this age as well to make sure you aren’t hit with penalty fees in your later years.

Not being aware of these milestones and acting in a timely manner could cost you dearly.

Sources: https://www.investopedia.com/terms/r/requiredminimumdistribution.asp, https://money.usnews.com/money/retirement/aging/articles/10-important-ages-for-retirement-planning