{"id":43573,"date":"2023-08-24T15:25:10","date_gmt":"2023-08-24T19:25:10","guid":{"rendered":"https:\/\/ilgfinancial.com\/staging\/2370\/?p=43573"},"modified":"2023-08-24T15:25:10","modified_gmt":"2023-08-24T19:25:10","slug":"ten-birthdays-impacting-your-retirement-income","status":"publish","type":"post","link":"https:\/\/ilgfinancial.com\/staging\/2370\/ten-birthdays-impacting-your-retirement-income\/","title":{"rendered":"Ten Birthdays Impacting Your Retirement Income"},"content":{"rendered":"

\"\"Your age significantly affects how much money you’ll have during your retirement years, and different retirement benefits have different eligibility ages. Over the course of 23 years, from age 49 to 72, you’ll need a financial retirement plan that pays close attention to these age milestones so you don’t miss out on financial opportunities or be subject to penalties.<\/p>\n

49: Max Out Retirement Accounts<\/strong><\/p>\n

If you began saving for retirement early in your career, you’re better poised to take advantage of compounding investment returns.<\/p>\n

50: Make Catch-Up Contributions<\/strong><\/p>\n

Making catch-up contributions allows you to load your retirement accounts with additional money and qualify for a more significant tax deduction.i<\/sup><\/p>\n

55: 401(K) Withdrawals and the Rule of 55<\/strong><\/p>\n

If you reach the age of 55 while the current calendar year is ongoing and you quit your job or are separated from it, you become eligible to start withdrawing funds from your 401(k) without having to pay the penalty for early withdrawal.ii<\/sup><\/p>\n

59\u00bd: IRA and 401(K) Penalties End<\/strong><\/p>\n

The 10% early withdrawal penalty on IRA and 401(k) withdrawals ends at 59\u00bd; however, you’ll need to pay tax on the money put in and the associated growth earnings.\u00a0iii<\/sup><\/p>\n

62: Eligible for Social Security Payments<\/strong><\/p>\n

If it’s part of your financial retirement plan, you can start collecting your Social Security payments at age 62. However, your monthly payments could be reduced by 30% if you begin payments before your full retirement age of 67.iv<\/sup>\u00a0And that reduction is permanent!<\/p>\n

65: Time to Consider Medicare Coverage<\/strong><\/p>\n

You have seven months to enroll in Medicare, and that window opens three months prior to the month you turn 65.v<\/sup>\u00a0This birthday’s important because your Medicare Part B premiums will increase by 10% for each 12-month period you were eligible for benefits but didn’t enroll.vi<\/sup><\/p>\n

66 \u2013 67: Social Security Full Retirement Age<\/strong><\/p>\n

If you were born between 1943 and 1954, you qualify for retirement at age 66. If your birthday is after 1959, you’ll have to wait one more year\u2014until age 67. And no matter your age here, there’s a built-in benefit if you wait on those payments.<\/p>\n

70: Boost your Monthly Social Security Payments<\/strong><\/p>\n

Social Security payments increase by a certain percentage for each month you wait to start your payments between your full retirement age and age 70.vii<\/sup>\u00a0Plus, if you’re still working, the additional income could push you into a higher tax bracket. After age 70, there’s no additional benefit to waiting.viii<\/sup><\/p>\n

72: 401(K) and IRA Required Minimum Distributions<\/strong><\/p>\n

If you have money in a retirement plan such as a 401(k) or traditional IRA, your first distribution must be taken by April 1 of the year after you turn 72 (73 if you reach age 72 after December 31, 2022). The excise tax for missing a required minimum distribution is a stiff 50% of the amount that should’ve been taken. But the SECURE 2.0 Act drops the excise tax rate to 25%, and possibly 10% if the RMD is corrected within to years.ix<\/sup><\/p>\n

Whether you’re heading into this span of important birthdays or are already in the thick of it, it’s important to factor these milestone ages into your financial retirement plan. Reach out to our team today at (540) 720-5656<\/a> to ensure you’re prepared for each birthday!<\/p>\n

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Sources:<\/p>\n