Retirement Deadlines You’ll Want to Know About
August 13, 2020
When you reach your 50s, you are in the home stretch of retirement planning. Your kids are grown, your income is good, and you’ve been making good choices along the way. Still, as the retirement finish line looms closer, there is still plenty to think about, and many adults worry that they’ll make a misstep and stumble.
Retirement Income Strategies and Deadlines in Your 50s
In your 50s you should be actively working through your retirement income strategies and have a clear path. Work with your financial consultant to determine your retirement income and how much your retirement savings will be able to cover.
- Age 55
If you leave your current employer after age 55, you may be eligible to take a distribution from your 401(k) or other employer retirement plans without early withdrawal penalties.
This is the decade to be as aggressive as possible with retirement savings. It’s a good time to have a clear financial picture so you can make up any gaps.
Retirement Income Strategies and Deadlines in Your 60s
Your 60s will most likely bring the final years of your working life, and several big deadlines as well.
- Age 62
This is the minimum age to begin receiving Social Security benefits. However, each year you postpone, through age 70, will increase your monthly check. At 62 you’ll want to have determined your strategy. Even if you’ve already retired, you can continue to defer Social Security until age 70 if you have another source of income.
- Age 65
Most Americans are now eligible for Medicare. Medicare comes in four segments (parts A, B, C and D) and the rules for signing up for benefits for each can be confusing. Medicare’s website will help you with enrollment deadlines and premium costs. Age 65 is also the year to consider purchasing a private “Medigap” insurance policy. Knowing that medical costs will factor into your retirement income strategies, this is a good time to speak with your financial consultant about how to navigate health care in your retirement years.
- Age 66/67
Depending on what year you were born, this is your “full retirement age” for Social Security. You will be eligible for 100% of your benefit. However, waiting to begin can still pay off.
Retirement Deadlines in Your 70s
If you waited until now to begin taking Social Security, you are now able to get the biggest monthly benefit possible. Delaying further won’t increase your benefits, so it’s time to start. After age 70 you will also have a required minimum distribution (RMD). Most of these deadline dates happen between 70 ½ and 72, and they can be confusing.
Beginning in 2021 your RMD must be taken when you turn 72. If you have an IRA account you can choose to delay taking your first RMD until April 1st of the year after you turn 72, but that year you will have to take two distributions to make up for delaying your RMD.
If you have an employer sponsored plan and you are still working, there may be additional considerations that you can benefit from depending upon your situation. Missing these deadlines can have big tax repercussions, and will cost you a 50% penalty, so it’s important to speak to your financial consultant as you approach 70. They will be able to look at your accounts and advise you on what to withdraw and when so you can minimize your tax burden.
Missing retirement deadlines can cost you in taxes and missed opportunities to increase your incomes, so when working on your retirement income strategies, it’s important to note these years and make sure you are on top of the deadlines. Having the right financial expert working with you can make a big difference. We know retirement planning can be confusing, especially if you’ve never done much more than contribute to the fund that was set up by your employer. It’s time to speak with a financial consultant who can help you understand your retirement plan and help you plan for the retirement income you’d like. Contact us today.
By Jeff Mohlman