Written by: Stephen C. Hartnett, J.D., LL.M.

There are many milestones in retirement. Financial advisers might advise that you achieve certain financial benchmarks by specific ages or stages in your life. They might advise that you have a certain multiple of your salary by specific ages. Or, they might advise having a nest egg of a particular size before you retire. Here’s a retirement calculator that might help you determine your progress as you plan for retirement.

But, there are certain age-related milestones you need to remember as you plan for retirement:

50. Beginning at age 50, you can make additional “catch-up” contributions to your 401(k) or IRA. The limit for 401(k) contributions is $18,500 in 2018, but those age 50 or over may make an additional $6,000 contribution. The limit for IRA contributions is $5,500, with an additional catch-up contribution of $1,000 for those age 50 or over.
55. Beginning age 55, you can take distributions from former employers’ retirement plans without the 10% early withdrawal penalty. You must have permanently left the job, no matter the reason. Of course, these withdrawals would still be taxable income (unless they are from a Roth 401(k)).
59 ½. Beginning age 59 ½, you can take payouts from an IRA or from any employer’s retirement plan, including your current employer, without the 10% early withdrawal penalty. As noted above, these withdrawals would be taxable income unless from a Roth 401(k) or IRA.
62. You can start taking social security benefits at age 62, assuming you’ve paid into the system for the requisite number of years. If you take benefits at age 62, your benefit would be permanently reduced for each month you take benefits before your full retirement age.
65. If you’re not disabled, you become eligible for Medicare benefits at age 65. (Medicare becomes available to some disabled individuals before age 65.) Here’s a link to Medicare’s website to find out more information.
65, 66, or 67. This is your full retirement age, depending on when you were born. For example, if you were born in 1937 or earlier, 65 is your full retirement age, while if you were born in 1960 or later, 67 is your full retirement age. Here’s a link to Social Security’s website showing full retirement age by when you were born.
70 ½. At this age, generally you must start taking distributions from your IRAs and retirement plans. The first distribution must be taken by April 1 of the year after you turn age 70 ½. But, if you wait until the year after you turn 70 ½ to take the first distribution, you’ll have to take two distributions in that year.

Retirement is a time during which you can savor many joyous occasions and can explore new passions. But, to get the most out of retirement, it’s best to have a good plan in place. Knowing these important ages will help you prepare that plan.

Stephen C. Hartnett, J.D., LL.M.
Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (858) 453-2128
www.aaepa.com