Yesterday, my son Ethan celebrated his 9th birthday. He was super excited for his cake and his gifts—most of all his new skateboard. To Ethan, 9 is a pretty important year—it is the last year in the single digits. He says he feels like he is really growing up…
There are some milestone birthdays in life: Sweet 16…casting your first vote at 18…being an official drinker at 21…or age 25, when you can finally rent a car…. When you start crossing milestone birthdays such as turning 30 or 40 or 50, some of us start to ignore the number!
In the financial world, there are some really big birthdays that are important—here is a list of some of the birthdays that you should pay attention to!
50—At this age, you are allowed to bump up the amount that you are saving in retirement accounts. In IRAs, you are allowed a “catch up” contribution of $1,000, bringing your total in 2017 to $6,500. In 401K accounts, you are allowed a “catch up” contribution of $6,000, bringing your total allowable annual contribution to $24,000.
55—If you leave your job, at 55 you are allowed to take withdrawals from your 401K account—not your IRA–without paying the 10% early withdrawal penalty.
59.5—Once 6 months past your 59th birthday, you no longer have to pay the 10% early withdrawal penalty on IRA withdrawals.
60—Widowers may take their widowers social security benefit as early as age 60.
62—Early retirement age for social security is at age 62, albeit with drastically reduced benefit amounts.
65—You must apply for Medicare in the three months preceding, the month of, or the three months after your 65th birthday. If you miss this window, you may face permanent penalties.
67—The new retirement age for anyone born after 1960 was pushed by two years from age 65.
70—After age 70, there is no additional benefit to delaying social security benefits. At this age, you have achieved the highest possible deferral increase.
70.5—In the year following the year in which you turn 70.5, you must begin taking required minimum distributions from your IRA. If you forget and miss a required distribution, you are subject to a 50% penalty. Yikes!!
Age is just a number, but at some ages it pays to pay attention to which number you are on… 😊