Hitting These Ages Triggers Critical Financial Planning Decisions

Hitting age 50 is a major life milestone. It’s also one of several key ages that triggers some critical financial planning decisions. Today, we’ll review various age milestones and discuss the financial decisions they trigger.

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Episode Overview

iTunes Between Now and Success

When it comes to your money, certain decisions are triggered simply because of your age. For example, age 62 is the earliest you can start receiving Social Security payments, other than receiving a widow’s benefit.

Other important ages for financial planning include 55, 59-1/2, 60, 62, 65, 66, 67, 70, and 70-1/2.

Join us as we explore the age-related decisions you need to make to ensure you end up with the highest amount of after-tax savings and income as possible.

Download the Transcript Here

Bill Keen
Bill Keen: Birthdays are a good time to check-in with your financial advisor.

Five Quotes From Bill in This Episode

  1. At age 50 and older you are allowed to make “catch up” contributions to various retirement plans. If you feel you’re behind on saving for retirement, the laws allow you to make “catch up” contributions that are above the normal contribution limits. Plans eligible for these additional contributions include 401(k)s, IRAs, and other plans. Here’s a link with additional details on the contribution limits.
  2. There are ways to access money in retirement accounts prior to age 59-1/2 without paying the 10% early withdrawal penalty. At age 55, if you retire, quit, or are laid off from your job in the calendar year you turn 55 or later, you have some options to take money out of your company’s 401(k) without the early withdrawal penalty. A provision called 72(t) gives you some options to withdraw money from other retirement plans, too, prior to age 59-1/2 without the 10% penalty.
  3. If you are age 60 and a widow or widower, you can start receiving Social Security payments. While you can do this online, I always recommend widows and widowers go to the Social Security office to get all the information and find out how this benefit works. It can get complicated to determine whether to take the benefits early or delay them. Take a look at this information from the Social Security Administration.
  4. Healthcare costs are top of mind with many retired people and age 65 is a key marker for this issue. At age 65 Medicare kicks in. This is the federal health insurance program and while it covers many items, you may still need to purchase gap coverage for the services not covered by the program.
  5. You can’t keep money in your IRAs indefinitely. At age 70-1/2, you’re required to take distributions from your IRA accounts. You’re required to take a certain amount out based on a formula, based on the account balance as of the end of the prior year and your life expectancy. Here’s a primer from the IRS on details related to required minimum distributions.

On taking Social Security early…

There are some factors to it besides just the math. It’s health, it’s your family history, and it’s personal as well, so what I want to do is just make sure people are evaluating these things, and getting out ahead of them, and making informed and educated decisions.

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30 Minute
Strategy Session