From the time we start our first job and saving for retirement, there’s countless life events we encounter that makes time go by quickly. As those events pass and we find ourselves approaching the midpoint or later stages of our career, there are key ages to remember on our path to retirement.
- Age 49 & Under: The 401(k) contribution limit is $19,000 in 2019. You can also contribute up to $6,000 in a traditional or Roth IRA in 2019.
- Age 50: Employees age 50 or older can make 401(k) catch-up contributions of up to $6,000 for a maximum possible 401(k) contribution of $25,000 in 2019. You can also contribute a total of $7,000 in a traditional or Roth IRA for 2019.
- Age 62: This is the earliest age you can claim regular Social Security benefits. If you continue to work and claim Social Security before your Full Retirement Age (FRA), your benefit will be reduced by $1 for every $2 earned above $17,640 in 2019.
- Age 64¾: The initial Medicare sign-up window lasts for seven months. If you miss it, you may have to pay higher premiums. If you have medical insurance provided by an employer or your spouse’s employer, you can postpone enrolling until that coverage ends without then having to pay higher premiums.
- Age 65: Medicare begins, and you can sign up for Medigap. Medigap is private insurance that covers some out-of-pocket copays and deductibles of traditional Medicare.
- Age 66-67: Social Security Full Retirement Age (FRA). Depending on the year you were born, your full retirement age will vary between the ages 66 and 67. If you continue to work and claim Social Security in the same year you reach full retirement age, your benefit will be reduced by $1 for every $3 you earn above $46,920 in 2019. Beginning with the month you reach full retirement age, there are no limits on earnings.
- Age 70: File for Social Security benefits if you haven’t already as this is when your benefit is at its most.
- Age 70½: Begin required minimum distributions (RMDs) from you 401(k) Plan or Traditional IRA. By law, you must take withdrawals no later than April 1st in the year after you reach age 70½. If you don’t, you could owe a penalty of up to 50% of the amount you should’ve withdrawn. If you have money in a Roth IRA, there is no required minimum distribution at any age.
Because everyone’s personal situation is unique, please contact a professional in one of the areas with questions. No matter your age, being prepared and ready for retirement is important. For those nearing retirement, having knowledge of these key ages can help you become more confident and comfortable with retiring.
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