Mark Your Calendars: Retirement Dates To Remember
Most of us spend much of our working life making some retirement plans. When we are young, retirement seems far away and vague. As we get older, and our plans take shape, we view retirement with both anticipation and, perhaps, a little anxiety. No matter what stage you are in, it is important to be aware of certain dates in your own life cycle in order to reap the benefits of your retirement planning.
Here are some key ones to consider:
Age 50. At 50, you can sock away extra money in 401(k) plans and IRAs.
Age 59 1/2. At 59 1/2, withdrawals on retirement accounts are not subject to the 10% early withdrawal penalty. Withdrawals from certain accounts remain taxable.
Age 62. This is the first year of eligibility for Social Security payments. If you wait to sign up at a later age, you will receive larger payments. If you sign up and continue to work, part or all of your payments could be temporarily withheld.
Age 65. Your Medicare eligibility begins at 65.
Age 66. If you were born between 1943 and 1954, your full Social Security payments can begin at age 66. This is your “full retirement age” and there is also no penalty for working and collecting Social Security benefits. Workers born between 1955 and 1959 have a “full retirement age” that slides upwards, until you reach 1960 where the retirement age jumps to age 67.
Age 67. This is the age for full Social Security payments for people born in 1960 or later.
Age 70. If you can delay your Social Security benefits until you reach age 70, the resulting payments will be significantly larger. After age 70, there is no additional benefit to postponing Social Security payments.
Age 70 1/2. Required distributions from traditional IRAs and 401(k) accounts begin at this age. Failure to take the correct distribution results in a significant tax penalty.
Part of retirement planning is being aware of landmark dates. Mark your calendar with the above key milestones. Your retirement planning depends upon making the right choices at the right time.
Source: U.S. News & World Report