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When it comes to retirement milestones, there is rarely just one right answer. Especially since the federal government may change goals or use variables that could be confusing.
Case in point: A few years ago, the age at which many people had to start withdrawing money from most types of retirement accounts was raised from the year they turned 70½ to the year they turned 72. More recently, it’s been raised again — and now it’s not the same age for everyone.
Below is a list of key ages for retirement planning. This also includes the age of withdrawal required. It includes details about who is affected and how they are affected.
Age 50: Retirement account catch-up contributions
Everyone should be saving steadily for retirement. But the federal government is trying to make life a little easier for those who start late by allowing “catch-up contributions.”
These are the maximum amounts that people over the age of 50 can put into their retirement account each year.
For example, for the year 2023, base Contribution limits for most workplace retirement accounts $22,500 and the catch up The contribution limit is $7,500.
That means anyone under the age of 49 can put up to $22,500 in total into their 401(k) plan this year. But someone over 50 can add $22,500 plus another $7,500 for a total of $30,000 in her 401(k).
For more information on current contribution limits for all types of retirement accounts, see IRS to Raise Thresholds for Nearly All Retirement Accounts in 2023.
Age 55: HSA catch-up contributions
The IRS allows catch-up contributions through another type of account (Health Savings Account, or HSA).
In 2023, people over the age of 55 will be able to donate an additional $1,000 to HSA each year, assuming they qualify for one of these accounts.
Designed for people with high deductible health insurance plans, an HSA is a savings or investment account that allows you to reimburse yourself for eligible medical expenses.
HSA is also tax exempt provided it complies with IRS regulations. As detailed in 3 Ways Health Savings Accounts Can Improve Your Finances:
“Putting money into a health savings account is one of the few ways you can completely avoid paying taxes on your money.”
Age 59½: Retirement Account Withdrawals Without Penalty
Money in a retirement account can be used early for purposes other than retirement, but it’s not an easy choice. For example, early withdrawals from an Individual Retirement Account (IRA) are typically subject to a 10% tax penalty.
This penalty expires at age 59½.
Age 60: Social Security Survivor Benefits
Survivor benefits are a type of social security benefit provided to the deceased’s family members who were receiving or were entitled to receive benefits at the time of death.
If you are eligible for survivor benefits, you can generally start receiving them at age 60.
Age 62: Early Social Security Retirement
If you, or your spouse’s or former spouse’s income history qualifies for Social Security retirement benefits, you can begin receiving these benefits when you turn 62.
Your benefits are reduced if you claim before reaching what is known as full retirement age. But some people can justify claiming as early as age 62, as highlighted in 5 Cases Where It’s Wise to Claim Social Security Early.
Age 64¾: Enrolled in Medicare
As you approach the age of 65, don’t miss your first enrollment window for Medicare, a federal health insurance program that primarily serves people over the age of 65.
One membership period is the month you turn 65, the three months before that, and the three months after that. That is, it starts around the age of 64.
Failure to register on time can delay your Medicare benefits and result in significant permanent financial penalties.
But remember, if you’re already receiving Social Security benefits when you turn 65, the Medicare program will automatically contact you and you don’t need to sign up.
Age 65: Medicare Benefits
If you signed up for Medicare during the first three months of your initial enrollment period, your Medicare benefits typically begin the month you turn 65.
Medicare program I will explain:
“In most cases, when you sign up for Part A and/or Part B during the first three months of your initial enrollment period, coverage begins on the first day of your birth month. If so, coverage will begin on the 1st of the previous month.
If you enroll in the month you turn 65 or during the last three months of your first enrollment period, coverage begins on the first day of the month in which you enrolled. “
Age 66-67: Full Social Security Retirement Age
The amount of Social Security benefits is based in part on when you started receiving benefits. To get full benefits, which means non-reduced benefits, you must reach full retirement age before you can claim them.
That age goal depends on when you were born.Here is a summary from Social Security Administration:
- For those born between 1943 and 1954: Your retirement age is 66.
- 1955: 66 and 2 months
- 1956: 66 months and 4 months
- 1957: 66 months and 6 months
- 1958: 66 months and 8 months
- 1959: 66 months and 10 months
- 1960 onwards: 67
Age 70: Maximum social security benefits
You can also wait until you are past full retirement age to claim Social Security — at the latest until you are 70 — and as a result receive higher benefits on a permanent basis.
As explained in 7 Reasons You Shouldn’t Get Social Security at 62, delaying until age 70 will allow you to receive maximum benefits. Every time you defer a year past full retirement age, your benefits jump by as much as 8%.
After age 70, there are no further increases.
Ages 73-75: Minimum required distribution
The Minimum Required Distribution (RMD) is the minimum amount that you generally need to withdraw from most types of non-loss retirement accounts each year from the year you reach a certain age.
It used to be 72, but the recent Secure 2.0 law changed the starting age to 73. Also, if by the end of 2032 he is not over 74, the starting age is her 75.
73+: Eligible Charitable Donation
As long as you follow the rules, once you have an RMD (regardless of age), charitable donations count as part of it. this is, Qualified Charitable Distribution (QCD)and can deduct up to $100,000 in gross income each year from taxes.