Each type of retirement benefit has a different eligibility age. Your age plays a significant role in how much you can expect to receive from Social Security and what you need to do to avoid retirement account penalties.
Key Milestones for Retirement:
- 49 — Max out retirement accounts: Workers who begin to save for retirement early in their careers are best able to take advantage of compounding investment returns.
- 50 — Take advantage of catch-up contributions: Making catch-up contributions allows older workers to tuck additional money into retirement accounts and qualify for a more significant tax deduction in the years leading up to retirement.
- 55 — Your 401(k) withdrawal age: The rule of 55 allows you to avoid the 10% early withdrawal penalty, but income tax will still apply to each traditional 401(k) distribution.
- 59½ — The IRA retirement age: The 10% early withdrawal penalty on IRA distributions ends at age 59½; however, income tax is due on each withdrawal from your traditional IRA.
- 62 —Eligible to begin Social Security payments: You can start collecting your Social Security payments at age 62. However, monthly payments are reduced if you begin payments before your full retirement age.
- 65 — Medicare eligibility begins: You can first enroll in Medicare during a seven-month period beginning three months before the month you turn 65. Take care to sign up on time because your Medicare Part B premiums will increase by 10% for each 12-month period you were eligible for benefits but didn’t enroll.
- 66 — Baby Boomer’s Social Security full retirement age: Some Boomers qualify at age 66, while others have to wait a bit longer, so it’s essential to know your age number. Also, once you turn your full retirement age, you can work while receiving Social Security benefits without having any of your payments withheld.
- 67 — The Social Security full-retirement-age for younger generations: Generation X, Millennials, and younger workers born in 1960 or later need to wait until age 67 to qualify for their full Social Security benefit.
- 70 — Age to boost your monthly Social Security payments: Social Security payments increase by 8% for each year you wait to start your payments between your full retirement age and age 70. After age 70, there’s no additional benefit to waiting.
- 72 — The 401(k) and IRA required minimum distribution: Your first distribution must be taken by April 1 of the year after you turn 72. The penalty for missing a required minimum distribution is a stiff 50% of the amount that should’ve been taken.
Remember to factor these important ages into your retirement plan. If you’re working with a reliable financial professional, reaching these milestone numbers should already be part of your retirement plan. If you feel you’re missing a few numbers, give us a call at (540) 720-5656.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Chase Lopez joined the ILG Financial team in 2020 as an advisor. Chase is a 2016 James Madison University graduate with a degree in management. Chase has been trained under the tutelage of Dave Lopez, who is not only the founder and managing member of ILG Financial, but also is Chase’s uncle and godfather. He also enjoys working alongside his cousin, Megan, who is Dave’s daughter. Chase, as a fiduciary, believes in putting his clients interests first, and building out plans for his clients where they can have a happy and fruitful retirement. He married his beautiful wife in February 2022 and both use most of their free time chasing around their little pup, Aurora.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.