My brother recently attended a retirement seminar at work and shared his notes with me. He learned about 7 key retirement dates and I thought they were so useful, that I want to share them with you.
Here are the seven major milestone dates to keep in mind.
Age 59 1/2
At age 59 1/2 people who’ve invested in IRAs can start to take penalty-free withdrawals without needing any special reason. Of course, income taxes may still be owed, but the 10% early withdrawal penalty fees no longer apply.
Age 62
Age 62 is the earliest date when an otherwise healthy person can start to take their monthly social security payment. If you do start before your full benefit age, you will most likely receive a reduced monthly benefit. There are many good reasons to start at age 62 and many good reasons to wait. But, that’s an in-depth conversation to have with your financial advisor.
Age 64 3/4
At age 64 3/4 it’s time to contact Medicare to start the process so that you have access to the government health insurance program when you reach your 65th birthday. Of course, if you are planning to continue working past 65 and wish to stay on your employer’s plan, then a different age and timeline will apply. But, check into this very carefully. Otherwise, you may suffer the consequences of missing your open enrollment window and pay higher premiums for the remainder of your life.
Age 65
Welcome to the world of Medicare insurance! This traditionally starts when most people attain the age of 65.
Age 66-67
At age 66 or 67 depending on your birth year, you will become eligible for your full monthly social security payment, so long as you have not started your benefit payments earlier.
Age 70
At age 70 your maximum social security benefits top out. To start receiving your first benefits at age 70, make sure you go to your local social security office when you are 69 3/4’s.
Age 72
At age 72 you must start withdrawing from your IRAs. In fact, if you don’t, you will have to pay a penalty for your failure to withdraw. The benefit you must take is your “required minimum distribution” often referred to as an RMD or an MRD. Either way, it’s time to start withdrawing your money from your accounts. There are exceptions for Roth IRAs – check with your financial advisor or the institution that holds your investments.
You can remember these key dates by marking your calendar or planner or using the old-fashioned method of printing this blog post and keeping it with the important papers that you review from time to time. When you reach a milestone date, blow out the candles, eat some cake, then take care of your personal business.